The minister of Finance, Kemi Adeosun, has revealed that the federal government is not paying subsidy to keep fuel price at N145, adding that there is under recovery on the part of the Nigerian National Petroleum Corporation (NNPC).
Adeosun disclosed this while speaking to State House correspondents after the federal executive council meeting presided over by President Muhammadu Buhari at the presidential Villa on Wednesday.
The minister said Nigerians have been bearing the burden of revenue loss from the NNPC.
Adeosun said: “On the question of subsidy, the price of oil for Nigeria today is a double edge sword. So every dollar that goes up we get more revenue but also because we are importing refined petroleum increases the landing cost of fuel.
“So for every time we get excited that the oil price is going up, there is also a knock on effect on the price of imported PMS and that is a function of us not having refining capacity, it is one of the unfortunate impact of that.
“Now, when there is talk of payment of subsidy, technically today, there is no subsidy but there is under recovery. Why that is, is because NNPC are currently doing all the importing. They are importing at a higher price than they are selling which means they are losing money, which means effectively that loss is being borne by everybody and effectively it reflected in the federation account.
“So, there is no subsidy payment in the way the old subsidy scheme use to work where they were paying the oil marketers but there is an under recovery, a loss on the importation of PMS being borne by NNPC and therefore indirectly being borne by everyone one of us.”