•Dele Oye: Trillions recorded by NNPCL is subsidy in disguise By Nnamdi Ojiego When President Bola Tinubu declared on May 29, 2023 that “fuel subsidy is gone,” it marked what many believed was the end of one of Nigeria’s most expensive and controversial fiscal policies. The announcement triggered an immediate rise in petrol prices, sparked nationwide protests, and was defended by the government as a painful but necessary reform to free up public funds for infrastructure, education, healthcare and other critical sectors. More than three years later, however, a fresh debate has emerged over whether the subsidy actually disappeared or merely changed form.
That debate was reignited after Chairman of the Alliance for Economic Research and Ethics Ltd/GTE and former National President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, NACCIMA, Mr. Dele Oye, alleged that the Federal Government’s N17.5 trillion receivable recorded by the Nigerian National Petroleum Company Limited, NNPCL, amounted to “fuel subsidy in disguise.” His assertion, first made in a public statement, generated widespread interest and raised fundamental questions. If subsidy had indeed been removed, why had such a huge liability accumulated?
Was the entire N17.5 trillion truly subsidy? Was NNPCL simply recovering legitimate operational costs under the Petroleum Industry Act, PIA, or was the government quietly financing petrol price support through another route?To answer those questions, Sunday Vanguard sought further clarification from Oye. In an extensive evidence-based response supported by NNPCL’s 2024 audited financial statements, provisions of the Petroleum Industry Act, PIA, relevant sections of the Constitution and findings by the World Bank, he offered a more nuanced explanation of his earlier claim.
Implicit subsidy His position is that while the entire N17.512 trillion should not be described as fuel subsidy, a substantial portion of it represents what economists would recognise as an implicit subsidy because government, rather than consumers, absorbed part of the cost of imported petrol. One of the first clarifications Oye made was that many people had misunderstood his earlier statement.According to him, the N17.512 trillion recorded by NNPCL as receivables from the Federation consists of two separate components.
Summary from source