Abubakar Bagudu, Minister of Budget and National Planning, has clarified that the Nigerian National Petroleum Company Limited (NNPCL) is using savings from the removal of the fuel subsidy to sustain the current pump price of fuel. In an interview with Channels Television on Saturday, Bagudu addressed concerns about the absence of a fuel subsidy in Nigeria’s 2024 budget.
He explained that since the subsidy was abolished in June 2024, the NNPCL’s financial contributions have been limited because the cost of fuel imports exceeds the retail price. “NNPCL is expected to contribute significantly, but it must use its funds for fuel imports, which affects its role in ensuring energy security,” Bagudu said.
The removal of the subsidy, which saw pump prices rise from ₦238 to over ₦600 per liter, is a major issue in the ongoing #EndBadGovernance protests. Bagudu noted that the government is addressing public concerns and implementing reforms. He also mentioned that NNPCL’s role under the Petroleum Industry Act involves determining fuel prices, with no provision for subsidies, as losses are absorbed if prices are below import costs. The Major Energy Marketers Association of Nigeria reports that the current landing cost of fuel is ₦1,170 per liter, while retail prices range between ₦617 and ₦850 per liter.
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