Use of technical terms to cover up misdeeds or avoid full disclosure of a situation is a common practice among government officials, and Nigerian government is notorious for this.
Mrs Kemi Adeosun, Nigeria’s Minister of Finance, deployed this tool while addressing State House correspondents at the Presidential Villa, Abuja on Wednesday, January 30, 2018, on the issue of payment of petroleum subsidy by the government.
She said there is no subsidy in the way it is known previously, but there is an under-recovery which also means subsidy.
“On the question of subsidy, the price of oil for Nigeria today is a double-edged sword. So every dollar that goes up, we get more revenue but also because we are importing refined petroleum, it increases the landing cost of fuel…It is one unfortunate impact of that,” she said.
“Now, when there is the talk of payment of subsidy, technically today, there is no subsidy but it is under-recovery. Why that is so is because the NNPC is currently doing all the importation.”
So, what is under-recovery?
According to Petroleum Support Fund (PSF) Act 2010 as revised, Under-recovery is the excess between landing cost of petroleum products and approved depot price by the PPPRA.
The cost differential known as under-recovery, and it is simply subsidy paid to keep the price at the PPPRA’s price.