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Published On: Thu, Jan 18th, 2018

Reps demand supplementary budget for fuel subsidy

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•Summon Kachikwu, Baru, Umar
•As Senate accuses NNPC, marketers of N784bn fraud

By Umar Muhammad Puma, Ikechukwu Okaforadi and Christiana Ekpa

The House of Representatives has called on President Muhammadu Buhari to formally request for approval of budgetary provision for fuel subsidy, if there is need for such, as the National Assembly considers the 2018 appropriation bill.
The House has also summoned the Minister of State for Petroleum, Ibe Kachikwu, Group Managing Director (GMD) of the Nigeria National Petroleum Corporation (NNPC), Baru Maikanti and head of the Petroleum Products Pricing and Regulatory Agency (PPPRA), Abdulkadir Umar to appear before its joint committee on Petroleum Resources (downstream), and Finance, “to account for the monies expended on subsidy payment since January 2017 to date”, as well as the current petroleum pricing regime.
This is just as the Senate Committee on Petroleum Downstream has alleged that the Nigeria National Petroleum Corporation (NNPC) and Independent marketers swindled Nigeria to the tune of N784,700billions on surplus volume of fuel importation of about 5.9bn litres in 2017 alone.
In a motion under matters of urgent public importance sponsored by Rep Karimi Sunday, told his colleagues that reports have it that as at December 2017, over N300 billion has been expended on petrol subsidy for last year alone.
According to the lawmaker, top government functionaries, including the Vice President, Prof. Yemi Osinbajo have publicly confirmed that the landing cost of a litre of petrol is N171, while the pump price ceiling was pegged at N145. “At the moment, it is the NNPC that is paying the differential of N26 per litre, despite the fact that the federal executive has posited that it has removed petroleum subsidy, and there is no parliamentary appropriation for subsidy in 2017…”.
Speaker of the House, Hon. Yakubu Dogara had on the resumption of plenary on Tuesday, recalled the assurance of the Presidency that fuel subsidy has come to an end, adding however that “from recent developments on this subject, except the Executive adduces compelling reasons why the reverse is the case, we will be justified in feeling betrayed”, as he tasked relevant committees of the House to get to the roots of the matter.
Several members, including Deputy Majority Whip, Pally Iriase, Ahmad Pategi, Chairman of the petroleum downstream committee, Akinlaja Joseph, Haassan Saleh, Aminu Shagari and Sergius Ogun spoke in support of the investigation.
According to Shagari, the government may have found itself “in a precarious situation” after pegging the pump price at N145, while the landing cost has increased, adding that he was worried at the decision of the government to remove subsidy, and yet fix price for the product.
On the fraud allegations, the senate consequently directed its committee on Petroleum Resources (downstream) to carry out thorough investigation on the alleged fraud.
This is even as the Upper Chamber vowed to sanction the executive on any un-appropriated spending made henceforth particularly as regards the illegal subsidy regime of N26 per litre being effected on fuel sales in the country.
The N784bn fraud according to revelations made to that effect in the interim report of the Senate committee on Petroleum Resources (downstream), on lingering fuel scarcity in the country, came about through 5 days surplus importation at 35million litres per day by NNPC on monthly basis totalling 60days surplus importation in addition to marketers 109 days surplus supply.
The committee in the report stated thus: “NNPC said it is importing 30 cargoes of 30,000 meric tons (minimum) of PMS monthly through the Direct Sale Direct Purchase (DSDP) scheme.
“This means NNPC is importing 30x 30,000x 1, 341= 1, 206,900, 000 litres of PMS monthly. Therefore, at an average consumption of 35million litres /day, NNPC said the country consumes between 27-30 million litres /day from January to September and 30- 40 million litres per day from September to December.
“From the above figures, NNPC monthly supply is supposed to last the country for about 35 days at 35million litres per day. The marketers on the other hand received from government about N1.669, 180,182 billion at CBN rate of N305 to a dollar to import PMS from January to August 2017. This means that marketers were supposed to bring into the country about 3.8bn litres of PMS at landing cost of N133.
“In other words, marketers supplies were supposed to serve the country for about 109 days at 35m litres daily in 2017. The implication of the foregoing is that NNPC has 5 days surplus every month, 60 days surplus in a year, added to the marketers 109 days’ supply, totalling 169 days’ supply surplus at 35million litres /day or 5.9bn litres which when multiply by N133 subsidised landing cost per litre amounts to N784.700bn”.
The committee through its Chairman, Senator Kabiru Marafa (APC Zamfara Central), alleged further that the fraud arose from emergence of subsidy regime in the sector again, similar to the sharp practices carried out in the past through bogus volume of fuel importation.
Though the Senate based on observations made by senators that the report did not capture the subsidy fraud going on in the sector , returned it back to the committee for more thorough job but the Senate President. Bukola Saraki praised it for unearthing the 5.9bn litres volume importation fraud.

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