‘No Removal Of Kerosene Subsidy’

The address of Mrs Diezani Allison-Madueke, Petroleum and Natural Resources Minister to the Senate Panel.
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For years, the issue of the presidential directive given by His Excellency, the late President Umaru Yar’Adua, has been brought up again and again.
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There was a presidential memo written in 2009.
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At the time, an inter-ministerial meeting was held and both ministers of finance and ministers of petroleum at that time participated in the meeting.
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And during that meeting a decision was made to stay action on that memo.
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There was a very simple reason. Kerosene is a very fundamental product for every Nigerian and most of us here and on both ends of the table may not deal in kerosene daily but a majority of Nigerians do and there was a reason that government originally put a subsidy on kerosene and put a sealing of N50 per litre.
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It is true that while even today NNPC supplies it at that amount, the landed cost is N150, it may not get to a lot of Nigerians at that price.
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The sabotage of our product lines means that we cannot inexpensively move this product across the country.
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The GMD at that time wrote two memos asking the minister of finance for clarification on the stay of action on the presidential memo, no reply came.
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The GMD after him also wrote a memo – we have those memos – no clarification came.
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And hence the subsidy remained.
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The issue of deduction at source, very sensitive and it has been brought p again and again, is one that I think for the sake of the Nigerian polity, I need to say this very clearly.
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If you land a product at N150 and you sell it at N50, there is a N100 gap.
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Somebody has to cover that N100.
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If it is not budgeted for and NNPC is not able or was not able to retrieve that amount – in this case based on the first line charge in the appropriation act which is there clearly – it means that NNPC would have gone down or gone under a long long time ago just under the weight of that subsidy gap.
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On the issue of subsidy on kerosene and budgetary allocation, luckily for us all, the distinguished committee is sitting on this issue and a lot will bother on what this distinguished committee decides. I was not in office in 2009 when the presidential order was given.