The Nigerian National Petroleum Corporation (NNPC) spent N112.079 billion on fuel subsidy in the first 10 months of 2017, between January and October 2017, Vanguard reports.
Contrary to claims by oil marketers that subsidy re-emerged in October, making it unprofitable for them to continue fuel import, financial documents from the NNPC revealed that fuel subsidy officially returned in January 2017, a period when the NNPC started making provision for it in its financials. Confirming this, the NNPC Monthly Financial and Operations Report for October 2017, released last week, declared that in January 2017, the NNPC made a provision of N37.264 billion for under-recovery, another term for subsidy payment.
The difference with this current system of subsidy payment however, is the fact that the NNPC is making the payments to itself and not to other oil marketers as was the case in past subsidy regimes, since it had been the major importer and supplier of petrol over the last couple of months. The money utilized for funding the subsidy payments, according to the report, was from the proceeds of the NNPC sale of its domestic crude oil allocation, thereby cutting down the amount of money remitted to the Federation Account.