Bloomberg News

Nigeria Says It's Paying Fuel Subsidy, No Need for Strike

July 26, 2012

Nigeria’s government said it is paying a subsidy on gasoline after verifying claims, and that there is no justification for strike action by fuel retailers on the grounds they are not receiving the payments.

“Payments based on verified claims resumed after the June meeting of the Federation Accounts Allocations Committee,” when payments of 17 billion naira ($106 million) were made, the Abuja-based ministry said in an e-mailed statement today.

The Depot and Petroleum Products Marketers Association suspended fuel distribution in Africa’s top crude oil producer from July 25 because members haven’t received outstanding payments since the beginning of the year, said Dapo Abiodun, chairman of the association.

The government is verifying claims to “prevent overpayments,” the ministry said today. Some oil importers also owe the government “significant sums of money and the government expects that these will be paid,” it said, citing a report by a Presidential committee.

Fuel importers including the state-owned Nigerian National Petroleum Corp. received 1.1 trillion naira in fraudulent subsidies from the government between 2009 and 2011, according to a parliamentary committee that reported on the issue in April.

President Goodluck Jonathan partially reinstated the subsidy after unions staged a weeklong strike in January against his attempt to scrap it. Nigeria imports most of its gasoline needs because it lacks the refining capacity to meet domestic demand.

To contact the reporter on this story: Maram Mazen in Abuja at mmazen@bloomberg.net.

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net


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