Nigeria State Oil Company Denies Existence of $3.5bn Fuel Subsidy Fund

SEATTLE (Oil Monster): Nigeria’s state oil company on Wednesday denied parliament’s accusation that it had a $3.5 billion fund to surreptitiously subsidize imports of gasoline.

The upper house Senate said on Tuesday it would investigate the fund it said the Nigerian National Petroleum Corporation (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 145 naira ($0.48) 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.

 Courtesy: www.iol.co.za