NNPC denies existence of $3.5bn fuel subsidy fund


Nigerian National Petroleum Corporation (NNPC) on Wednesday denied National Assembly accusation that it had a $3.5 billion fund to surreptitiously subsidise imports of gasoline.
The upper house Senate said on Tuesday it would investigate the fund it said the NNPC was using without subjecting the monies for parliamentary scrutiny via the national budget.
NNPC responded with a statement titled “we don’t have $3.5 billion subsidy fund”. It said a $1.05 billion “National Fuel Support Fund” did exist, set up by the company “to ensure stability in the petroleum products supply”.
That fund was jointly managed by a group of bodies that included the NNPC, the central bank and the finance ministry, the statement by NNPC spokesman Ndu Ughamadu said. The fund was “domiciled” in the central bank and “NNPC did not independently spend a dime” of it, it added.
Fuel subsidies are contentious in Africa’s top crude oil producer, which imports most of its gasoline due to underperforming refineries. Prices are kept artificially low at N145 per litre.
As fuel prices increase globally, it has become unprofitable for private petrol marketers to import, with the NNPC stepping in to prevent major shortages.