*Accuses NNPC, others of subverting crude oil revenue worth over $10bn
*Sets up ad-hoc Committee to investigate subsidy regime from 2017 to 2021
*Says records show that as at 2021, over $7bn in over 120m barrels have been so diverted
*Frowns at “secrecy” behind public funds being expended on fuel subsidy regime
By Aaron Ossai
Worried by alleged $10 billion dollars spent by the federal government through the Nigeria National Petroleum Corporation, NNPC Limited on fuel subsidy, the House of Representatives yesterday resolved to set up an ad-hoc Committee to investigate the subsidy regime from 2017 to date.
The resolution followed the adoption of a motion on the matter sponsored by Hon. Sergius Ose Ogun (PDP-Edo) who underscored the need for accountability of public office holders managing the nation’s economy.
Leading debate on general principles of the motion, Hon. Ogun who frowned at the secrecy behind the application of the public funds being expended on fuel subsidy regime, alleged that Nigerian National Petroleum Corporation (NNPC) Limited, found it more convenient to export domestic crude in exchange for petroleum products on trade by barter basis described as Direct Sales Direct Purchase (DSDP) arrangement.
He lamented that the consumption rate of Petroleum Motor Spirit (PMS) is 40million to 45million litres per day saying however that NNPC uses 65 million to 100 million litres per day to determine subsidy as discoverable from NNPC’s monthly reports to the Federal Allocation Committee (FAAC).
“The House notes that section 88 (1) and (2) of the Constitution of the Federal Republic of Nigeria (as amended) empowers the National Assembly to conduct investigations into the activities of any authority executing or administering laws made by the National Assembly.
“The House also notes that Section 32 of the Petroleum Industry Act, 2021 saddles the Petroleum Midstream and Downstream Regulatory Authority with the task of regulating and monitoring technical and commercial midstream and downstream petroleum operations in Nigeria.
“The House is informed that as of 2002, the NNPC’s purchase of crude oil at international market prices stood at 445,000 barrels per day in order to enable it to provide petroleum products for local consumption.
“The House is concerned that as of 2002, the installed capacity of Nigeria’s local refineries stood at 445,000 barrels per day, however, their capacity utilization began to nosedive and eventually fell completely to zero due to the ineffectiveness and alleged corruption of critical stakeholders in the value chain.
“The House is aware that due to the decline in the production capacity of the refineries, NNPC found it more convenient to export domestic crude in exchange for petroleum products on a barter basis described as Direct Sales Direct Purchase (DSDP) arrangement.
“The House is also aware that component costs in the petroleum products subsidy value chain claimed by the NNPC is highly over-bloated while the transfer pump price per litre used by the NNPC in relation to PPMC is under quoted as N123-N128 instead of N162-N165 and this fraudulent under-reporting of N37-N39 per litre translates into over 70 billion naira a month or 840 billion naira a year.
“The House is worried that the consumption rate of Petroleum Motor Spirit (PMS) is 40million to 45million litres per day, however, the NNPC uses 65 million to 100 million litres per day to determine subsidy as discoverable from NNPC’s monthly reports to the Federal Allocation Committee (FAAC).
“The House is also worried that the subsidy regime has been unscrupulously used by the NNPC and other critical stakeholders to subvert the nation’s crude oil revenue to the tune of over 10 billion US dollars, with records showing that as at 2021, over 7 billion US dollars in over 120 million barrels have been so diverted.
“The House is disturbed that there exists evidence that subsidy amounts are being duplicated, thus subsidy is charged against petroleum products sales in the books of NNPC as well as against crude oil revenue in the books of NAPIMS to the tune of over N2 trillion”, the lawmaker observed.
The resolution was passed after a point of order raised by Hon. Osita Chidoka who urged the House to step down the motion which he argued was a duplication of the assignment being carried out by the Ad-hoc Committee investigating assets and liabilities of Nigerian National Petroleum Corporation (NNPC) Limited.
However, some other lawmakers countered his assertion saying that motion is entirely different from the ongoing investigative hearing being referred to.
Ruling on the motion after a robust debate on its general principles, the Speaker, Hon. Femi Gbajabiamila said that the ad hoc Committee, whose members will be announced today, will be given eight weeks to carry out the investigation and report back to the House for further legislative tinkering.
