We have not removed fuel subsidy-Osinbajo

“I have read the various observations about the fuel pricing regime and the attendant issues generated. All certainly have strong points. The most important issue of course is how to shield the poor from the worst effects of the policy.  I will hopefully address that in another note.

“Permit me an explanation of the policy. First, the real issue is not a removal of subsidy. At $40 a barrel there isn’t much of a subsidy to remove.

“In any event, the President is probably one of the most convinced pro-subsidy advocates. What happened is as follows: our local consumption of fuel is almost entirely imported. The NNPC exchanges crude from its joint venture share to provide about 50% of local fuel consumption. The remaining 50% is imported by major and independent marketers.

“These marketers up until three months ago sourced their foreign exchange from the Central Bank of Nigeria at the official rate. However, since late last year, independent marketers have brought in little or no fuel because they have been unable to get foreign exchange from the CBN.

“The CBN simply did not have enough. Meanwhile, NNPC tried to cover the 50% shortfall by dedicating more export crude for domestic consumption.

“Besides the short term depletion of the Federation Account, which is where the FG and States are paid from, and further cash-call debts pilling up, NNPC also lacked the capacity to distribute 100% of local consumption around the country. Previously, they were responsible for only about 50%. (Partly the reason for the lingering scarcity).”

This goes to confirm our previous stance that the Buhari led administration did not remove fuel subsidy.