Minister of state for petroleum resources,Ibe Kachikwu says subsidy on petrol currently costs the federal government N1.4 trillion annually.
The minister spoke a month after Maikanti Baru, group managing director of the Nigerian National Petroleum Corporation said that the state oil firm was subsidising petrol supply to the tune of N774 million on a daily basis.
Speaking at a workshop on Liquefied Petroleum Gas organised by the ministry on Thursday in Abuja, the minister described the amount spent as “under-recovery”.
According to him, this was because NNPC singlehandedly imports fuel into the country and bears the costs that arises therefrom.
The federal government had in August 2016 said it saved N1.4 trillion by not paying oil subsidy.
Kachikwu had said government made a savings in excess of N1.4 trillion since subsidy was removed from petrol in the early part of 2016.
He said such savings could kick-start the “long overdue process of revamping critical infrastructure in the downstream sub-sector such as pipelines, refineries and tank farms”.
This was corroborated by Yemi Osinbajo, vice president.
“With the deregulation of the downstream petroleum sector, there has been a significant increase in the availability of petrol throughout the country for the savings of N1.4 trillion on subsidy payments alone,” Osinbajo had said.
The administration of former president Goodluck Jonathan was engulfed in crisis in 2012 over claims that it had spent N1.2 trillion on fuel subsidy in 2011 in what was popularly tagged “subsidy scam”.
