The Nigerian National Petroleum Company Limited (NNPCL) is utilising the savings from the removal of the fuel subsidy to maintain the current pump price of fuel, according to the Minister of Budget and National Planning, Abubakar Bagudu.
This statement was made during an interview on Channels Television on Saturday, where he clarified that the 2024 budget of Nigeria does not include provisions for fuel subsidies.
When questioned about the savings accrued since the subsidy removal in June 2024, Bagudu explained that the NNPCL’s ability to contribute to the national coffers has been compromised due to the higher costs of fuel imports compared to the pump price being charged to consumers.
“That is the issue. If NNPCL is supposed to contribute the most it cannot contribute because I have to use the money to import fuel.
“NNPCL is obligated to provide energy security. Consequently what they are to provide is affected,” he stated.
This clarification comes amidst ongoing public uncertainty regarding the government’s fuel subsidy policy, which was officially removed in June 2023.
The subsidy removal led to a significant increase in the pump price of fuel, from N238 to over N600 per liter.
This sharp rise in fuel costs has been a central issue in the current #EndBadGovernance protests, which entered their third day on Saturday and are expected to last for ten days.
One of the primary demands of the protesters is the reinstatement of the fuel subsidy.
The #EndBadGovernance protests emerged from widespread discontent over economic conditions and government policies.
With thousands taking to the streets, demonstrators are demanding urgent government intervention to address the soaring cost of living and other socio-economic issues.
Several violent incidents, including deaths and looting, have marred the protests, intensifying the tense situation and prompting calls for an end to the protests.
While the Northern parts of the country have been rocked by the incidents of violence and arson, the South East and South West have largely experienced peaceful rallies.
Addressing the protesters’ demands, Bagudu emphasised that the government is attentive to the concerns of the Nigerian people and is committed to implementing reforms that reflect their needs.
“President Tinubu is listening to Nigerians so that we do things differently,” he assured.
In response to a query about whether the NNPCL had remitted any funds to the Federal Government, Bagudu admitted his lack of awareness on the matter but highlighted the financial strain faced by the NNPCL.
“I am not aware. Not necessarily, the Accountant-General should know. I will be surprised if they have done so. Let’s face it, you told somebody to import fuel and he says the cost of import is higher than the cost of the product being sold,” he said.
Bagudu pointed out that under the Petroleum Industry Act, the NNPCL is both a private liability company and is mandated with ensuring energy security.
This dual role complicates the financial situation.
“We have the NNPCL, the Petroleum Industry Act makes its private liability company and at the same time mandated it with energy security.
“So only NNPCL can say this is the price fuel is arriving in Nigeria. And if it is selling below that price, then obviously it is an NNPCL issue. It means it is NNPCL that is taking the loss.
“We don’t have the provision for fuel subsidy. That is not to say that NNPCL is not suffering a loss as a result of the difference between the landing cost and what it is being sold,” he explained.
Further, Bagudu shed light on the broader issue of the cost of governance in Nigeria, a significant concern amid the ongoing protests.
He acknowledged that the cost of governance remains high and that there is a pressing need for savings wherever possible.
“The cost of governance is worrisome, particularly me because I see how the kitty is allocated so I know that we are not anywhere near where we want to be. So any savings from any quarter is important,” he said.
Responding to questions about ministerial compensation, Bagudu revealed that Nigerian ministers receive a monthly salary of less than N1,000,000, as determined by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC).
He also mentioned that he personally opts to use a private vehicle instead of the official one provided to him.
“Ministers, like every public officer, have a payment that is determined by the Revenue Mobilisation Allocation and Fiscal Commission. I have one official vehicle but I don’t use it, I have a vehicle I love using,” he noted.
