NNPC denies existence of $3.5 bln fuel subsidy fund

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LAGOS, Oct 17 – Nigeria’s state oil company on Wednesday denied parliament’s accusation that it had a $3.5 billion fund to surreptitiously subsidise imports of gasoline.

The upper house Senate said on Tuesday it would investigate the fund it said the Nigerian National Petroleum Corporation (NNPC) was using without subjecting the monies for parliamentary scrutiny via the national budget.

NNPC responded with a statement titled “we don’t have $3.5 billion subsidy fund”. It said a $1.05 billion “National Fuel Support Fund” did exist, set up by the company “to ensure stability in the petroleum products supply”.

That fund was jointly managed by a group of bodies that included the NNPC, the central bank and the finance ministry, the statement by NNPC spokesman Ndu Ughamadu said. The fund was “domiciled” in the central bank and “NNPC did not independently spend a dime” of it, it added.

Fuel subsidies are contentious in Africa’s top crude oil producer, which imports most of its gasoline due to underperforming refineries. Prices are kept artificially low at 145 naira ($0.48) per litre.

As fuel prices increase globally, it has become unprofitable for private petrol marketers to import, with the NNPC stepping in to prevent major shortages.

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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