The Special Adviser to President Bola Tinubu on Information
and Strategy, Bayo Onanuga, has explained the difference between a fuel margin
discount and a government subsidy.
This comes amid controversy over the Federal Government’s
proposed 30-day fuel discount.
Onanuga made the clarification in a statement posted on his
X handle on Friday, explaining the difference between the two policies.
The government announced 30-day fuel discount at Nigerian
National Petroleum Company Limited, NNPCL, outlets.
In the statement titled “Margin Discount and a Subsidy Are
Not the Same,” the presidential aide explained that a margin discount occurs
when a fuel retailer reduces or temporarily waives its profit margin to pass
the savings on to consumers.
He said, “The ADC and NDC should carefully re-read this
ministerial brief: Margin Discount and a Subsidy Are Not the Same.
“Every marketer adds a margin to the price it pays for the
fuel it sells. A margin discount means the retailer chooses to take a smaller
margin, or no margin at all, for a period, and passes the savings on to the
customer. The cost of the discount is borne by the retailer alone.
“A subsidy is different. It is when the government pays part
of the price the consumer would otherwise pay.
“That money comes from public revenue funds that would
otherwise go to salaries, schools, hospitals and infrastructure. That is the
regime this administration ended in 2023, and it is not coming back.”
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