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Buhari makes u-turn, proposes N305bn for petrol subsidy in 2019 budget
After a ding dong affair between the Presidency, the Nigerian National Petroleum Corporation, NNPC, and the National Assembly, President Muhammadu Buhari on Wednesday said N305 billion has been earmarked for petrol subsidy in the 2019 budget proposal.
President Buhari stated this in his budget presentation speech to a joint session of the National Assembly in Abuja.
“We have earmarked N305 billion equivalent to one billion US dollars for under-recovery by the Nigeria National Petroleum Corporation on Premium Motor Spirit in 2019.
“Let me take this opportunity to address and clarify the under-recoveries on petrol.
“In a period of economic challenges where purchasing power is weak, we must reduce some of the burden on Nigerians,” he said.
It would be recalled that the National Assembly has been querying withdrawals by the NNPC from the NLNG dividends account to fund underrecoveries on petrol.
The Buhari administration had also withdrawn subsidy on petrol since 2016, forcing independent oil marketers to pull out of importation of the product, leaving the NNPC as the sole importer of petrol into the country.
Since then, the NNPC has been drawing from the Nigeria Liquefied Natural Gas dividend fund to cover the under-recoveries amounting to N40/litre in the importation of petrol.
The provision for subsidy in the 2019 budget proposal will however lay to rest the disagreement between the lawmakers and the NNPC on the matter.
Read also: 2019 BUDGET: Recurrent expenditure takes lion share
According to Buhari, the problem with subsidy in the past was abuse and corruption, especially by independent oil marketers.
“Today, the government-owned NNPC is the sole importer of PMS, and therefore the under-recovery is from the NNPC trading account.
“This means the possibility of some oil marketers filing bogus claims is removed.
“We will continue working to bring it (subsidy) downward to ensure such revenue sources are freed up to meet the developmental needs of our people,” the president said.
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