CEO of Nigeria’s largest indigenous Oil and Gas company, Mr. Wale Tinubu appeared before the ad-hoc committee investigating subsidy yesterday.
Mr. Tinubu setting the record straight disclosed that Oando was not a beneficiary of subsidy but a petroleum products marketer getting paid for a legitimate business it was transacting.
Tinubu disclosed to the committee that marketers, for instance, import 30,000 metric tons after opening an LC of $30 million and then go ahead to sell the product at $ 15 million. He revealed that subsidy is the amount government compensates them for their losses during sales.
Tinubu stated, “The Petroleum Support Fund (PSF) expected that there would be under-recovery. For example, when the landing cost was higher than the pump price, the government owed us money, which is paid as subsidy. When there is over-recovery, that is, when the landing cost is less than the pump price, we pay back to the government. For example, during the Yar’Adua administration, when the petrol price was N65 and the crude oil price dropped to $50 per barrel, the marketers paid back to the fund. I remember that Oando paid back N1.6billion back to the Federal Government.”
According to Tinubu, Oando accounted for 53% of petrol importation in 2006 and 47% of subsidy payment.http://www.thenationonlineng.net/2011/index.php/business/34581-oando-denies-benefitting-from-fuel-subsidy.html