Why Reps Probe 5-Year Fuel Subsidy, Allege N2.9tr Diversion
The House of Representatives has set up an ad hoc committee to investigate the petroleum products subsidy regime from 2017 to 2021. The committee is also to query an alleged $7 billion (about N2.905 trillion) oil proceeds diversion.
This followed the adoption of the motion by Rep Sergius Ose Ogun, who in a motion says subsidy has been used by the NNPC Ltd and other stakeholders to subvert the nation’s crude oil revenue of over $10bn.
He noted, records as at 2021 shows that over $7bn in over 120 million barrels of oil had been diverted.
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“Subsidy is charged against petroleum products sales in the books of NNPC Ltd as well as against crude oil revenue in the books of NAPIMS to the tune of over N2 trillion”.
He expressed worry that component costs in the petroleum products subsidy value chain claimed by the NNPC Ltd were “highly over-bloated while the transfer pump price per litre used by the NNPC Ltd in relation to PPMC is underquoted as N123-N128 instead of N162-N165.”
“Concerned that as of 2002, the installed capacity of Nigeria’s local refineries stood at 445,000 barrels per day, however, their capacity utilisation began to nosedive and eventually fell completely to zero due to the ineffectiveness and alleged corruption of critical stakeholders in the value chain”.
The lawmaker noted this under-reporting of N37-N39 per litre translates into over N70bn a month or N840bn a year.
“The House is worried that the consumption rate of Petroleum Motor Spirit (PMS) is 40m to 45m litres per day. However, the NNPC Ltd uses 65m to 100m litres per day to determine subsidy as discoverable from NNPC’s monthly reports to the Federal Allocation Committee (FAAC).”
The Speaker of the House, Femi Gbajabiamila, while ruling on the motion, said subsidy regime has been a thing of concern.
In response, he directed the Deputy Speaker of the House, the House Leader and the Chief Whip to gather a crack team that would probe the subsidy regime and that the committee has eight weeks to revert.
