The Minister of State for Petroleum Resources, Dr. Ibe Kachilwu on Thursday said the Federal Government currently incurs over N1.4 trillion yearly as under-recovery or losses on the importation and sale of petrol, minister of Petroleum Resources, Dr. Ibe Kachikwu.
The Minister made the disclosure at a workshop on the Harmonization of Liquefied Petroleum Gas (LPG) Regulatory Requirements in Abuja. He noted that the government through the Nigeria National Petroleum Corporation (NNPC), continues to shoulder such huge burden because of the over reliance of the country on premium motor spirit otherwise called petrol.
According to him
“The need for clean energy is very essential. We need to move away from the complete (reliance) of our transport sector on PMS. It is creating a lot of under-recovery of over N1.4 trillion around exposures to the government. The earlier we can begin to move into other components of cleaner fuels and rely less on PMS, the safer it will be. The issues of fuel queues will disappear.”
Speaking earlier, the Minister of Finance, Mrs. Kemi Adeosun also noted that although the Federal Government did not make provision for the payment of oil subsidy, it was bearing the burden of under-recovery because petroleum products are currently being imported by the Nigerian National Petroleum Corporation.
"They are importing at a higher price than they are selling, which means they are losing money, which means effectively that that loss is being borne by everybody and effectively it reflects in the Federation Account.
“So, there is no subsidy payment in the way the old subsidy scheme used to work where they were paying the oil marketers, but there is an under recovery, a loss on the importation of the PMS being borne by the NNPC and therefore indirectly being borne by everyone one of us,” she said.
