Lagos (Platts)--20Nov2012/839 am EST/1339 GMT
State-owned Nigerian National Petroleum Corp said Tuesday it is owed more than Naira 1.3 trillion ($8.2 billion) in government fuel import subsidies, debts which could impact on the corporation's fuel import program. "As at today, the outstanding amount due to the NNPC on subsidy claims is in excess of Naira 1.3 trillion. [The debt is] making things... difficult as we have been struggling to cope with our fuel import program," a senior NNPC official said. The government pays subsidies to importers to cover the difference between the landing cost of the fuel and the fixed domestic pump price. The subsidy debt rose steadily from Naira 752.7 billion at end of 2011 to Naira 1 trillion in the first half of this year, the official said. Article continues below...Request a free trial of: Oilgram NewsOilgram News brings fast-breaking global petroleum and gas news to your desktop every day. Our extensive global network of correspondents report on supply and demand trends, corporate news, government actions, exploration, technology, and much more.
State-owned Nigerian National Petroleum Corp said Tuesday it is owed more than Naira 1.3 trillion ($8.2 billion) in government fuel import subsidies, debts which could impact on the corporation's fuel import program. "As at today, the outstanding amount due to the NNPC on subsidy claims is in excess of Naira 1.3 trillion. [The debt is] making things... difficult as we have been struggling to cope with our fuel import program," a senior NNPC official said. The government pays subsidies to importers to cover the difference between the landing cost of the fuel and the fixed domestic pump price. The subsidy debt rose steadily from Naira 752.7 billion at end of 2011 to Naira 1 trillion in the first half of this year, the official said.
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Long queues of vehicles at service stations remain commonplace across major cities in the OPEC member country due to a shortage of fuel that first started to be felt three months ago. NNPC previously accounted for 60% of gasoline imports into the country but has taken on sole responsibility after private companies withdrew following delays in the payment of subsidies in the first and second quarters of this year. Following large-scale fraud uncovered in the management of the subsidy scheme that swallowed Naira 2.7 trillion in 2011, according to central bank figures, Nigeria said it will only pay subsidy claims cleared by a presidential panel set up to verify import documents submitted by companies. Nigeria imports more than 85% of its refined fuel needs due to the inadequate state of its refining sector. President Goodluck Jonathan Sunday said the government would still need to revisit the need to abolish subsidies and deregulate the downstream oil sector if the country is to attract private sector investors to build refineries in Nigeria and curb fuel imports.--Staff, newsdesk@platts.com--Edited by Alisdair Bowles, alisdair_bowles@platts.com
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