President Muhammadu Buhari on Wednesday said N305 billion had been earmarked for petrol subsidy in the 2019 budget proposal. Buhari stated this in his budget presentation speech to a joint session of the National Assembly in Abuja. “We have allowed N305 billion equivalent to one billion U.S. dollars for under-recovery by the NNPC (Nigeria National Petroleum Corporation) on Premium Motor Spirit in 2019,” he said.
The Buhari administration had withdrawn subsidy on petrol in 2016, forcing independent oil marketers to pull out of importation of the product. Their withdrawal left the NNPC as the sole importer of petrol, whose pump price remained capped at N145 per litre against a landing and supply cost of N185/litre.
Since then, the NNPC has been drawing from the Nigeria Liquefied Natural Gas (NLNG) dividend fund to cover the under-recoveries amounting to N40/litre in importation of petrol. So far, the NNPC has utilised 1.05 billion dollars or N320 billion of the fund to cover the under-recoveries, according to its Group Managing Director, Mr Maikanti Baru.
Source: Daily Trust