The Federal Government has revealed plan to set aside N305 billion or $1 billion for fuel subsidy payment in the 2019 budget proposal which was presented before the Joint Session of the National Assembly, Abuja, Wednesday.
President Muhammadu Buhari in his presentation disclosed that the N305 billion or $1 billion will be used to cater for NNPC “under-recoveries” or “fuel subsidy.”
He said, “We have allowed N305 billion, equivalent to $1 billion for under-recoveries by NNPC on premium motor spirit in 2019.
“We will continue working to bring it downwards, so that such resources are freed to meet the developmental needs of our people.
“Let me also use this opportunity to address and clarify the under-recoveries or subsidies on petrol in a period of economic challenges, our purchasing power is weak, we must reduce some of the burden on Nigerians.
The President further revealed that his subsidy arrangement is much more different from what they used to be in the past, stating that the NNPC is the sole importer of oil today.
“The problem in subsidies in the past was abuse and corruption. Today, the government through the NNPC is the sole importer of premium motor spirit,”
“Therefore the under-recovery is for the NNPC trading account. This means the possibilities of some marketer falsifying claims are removed.
Recall that the President during his campaign in 2015 disclosed that there is nothing like subsidy. Later, in 2016, the price of PMS was increased from N87 to N145 per litre.
The President defending his decision on the price increase, stated that the administration considered fuel price increase as a viable measure to stop subsidy payments.
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