Petrol subsidy should be scrapped – NNPC

The Group Executive Director (GED), Corporate Strategy and Planning, NNPC, has urged the Federal Government to  scrap the Petroleum Support Fund  (PSF) otherwise known as petrol subsidy, because the government has no control over the prices of crude oil, The Nation reports.

GED, Dr. Timothy Okon, who spoke in Abuja, explained that since the government lacked control over crude oil prices, it ends up  paying for the difference, a situation he said creates fiscal instability in the economy.

Okon also said the oil subsidy is a first line charge which is removed from the government revenue before it is shared among the three tiers of government.

The GED also noted that the subsidy regime predicates the revenue sharing formula on petroleum products consumption, despite the difference in quantity consumed in the constituent states.

Okon said: “So, it means if you are in Jigawa State when you need a few tanks for example, Jigawa is now paying out of the contribution say a state like Lagos where 40 per cent  of the gasoline in this country is consumed.

“So in a federal system it creates uneven distribution of its revenue.”

 

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