Senate directive on Wednesday to the Nigerian National Petroleum Corporation (NNPC) to halt subsidy deduction and to refund N216 billion already expended will trigger shortages of the fuel on a “monumental proportion”, officials of the corporation warned on Thursday.
The Senate, in issuing the directive, had described the subsidy claim by NNPC as illegal as the money was not appropriated and it also lacking in transparency.
While NNPC described the directive as impracticable “as only the president can give such order”, officials told TheCable Petrobarometer that halting the subsidy would create a big shortfall in supply.
“In a situation where private companies are not importing, leaving the NNPC as a sole importer, how do you provide for the 50 million litres of daily demand in the country,” an NNPC official, who declined being named, said.
NNPC previously put the subsidy claim on fuel import, which is tagged “under recovery”, at N774 million per day.
It said it had continued to bear the loss, which simply translates to a shortfall in revenue NNPC should have transferred into the federation account, to ensure uninterrupted fuel supply in the country.
Reuters reported on Thursday, that NNPC, seeking to maintain the normalcy in supply ahead of elections next year, had booked for a large quantity of petrol.
Nearly 1.5 million tonnes or 1.89 billion litres of petrol are on standby for shipment, the agency reported, quoting industry monitor Genscape.
Private companies abandoned fuel import complaining that the federal government declined to deregulate the sale of petrol in the domestic market, stopped payment of subsidy and was yet to pay the outstanding debt of over N800 billion on previous imports.