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Revealed: FG paid for extra 24m litres of fuel daily in 2011

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ABUJA-House of Representatives’ ad-hoc committee investigating the management of subsidy on Premium Motor Spirit, PMS,  was told yesterday  that the Federal Government paid for 59 million litres daily,  an excess of 24million litres throughout year 2011 despite the 35 million litre daily consumption capacity of the  country in the same year.

  Alarmed by the revelation, the committee expressed dismay that the gap between what was supplied and the consumption capacity which amounted to 24 million litres daily provided opportunity for the perpetration of sharp practices in the sector.

The Executive Secretary of the Petroleum Products Pricing Regulatory Agency, PPPRA, Reginald Stanley, while testifying before the committee, said the amount of petrol imported per day in 2011 was 59 litres. But the Petroleum Minister, Mrs Diezani Alison-Madueke, had on Tuesday given the daily consumption capacity as 35 million litres.

Chairman of the ad-hoc committee, Farouk Lawan, said: “How could the nation be made to pay for 59 million litres daily when we consume only 35 million litres daily? The balance of 24 million litres per day might be the area of sharp practices. By making that provision, you are encouraging smuggling because we know that this 24 million litres balance would simply be smuggled out of the country since it has been paid for already and we cannot consume it.”

When asked whether the country had the storage facility that could accommodate the sum total of the excess 24 million litres per day multiplied by the 365 days in 2011, the PPPRA boss said the nation’s storage capacity could only accommodate 1.4 billion litres of fuel.

“This is a case of serious economic sabotage because when the daily supply excess of 24 million litres is multiplied by 365 days, you get 8.76 billion litres. This is the volume of fuel that might have been smuggled out of the country in 2011.”

The helmsman of the regulatory body drew the attention of the committee to what he called serious challenges facing the oil industry pointing out that of the 46 depots in the country, only four could accommodate “mother vessels” bringing imported products to the country.

He advised the National Assembly to give accelerated consideration to the  Petroleum Industry Bill, PIB, to facilitate the deregulation of the petroleum sector.

The Executive Secretary, however, said: “It is very important that we begin to build strategic fuel reserves in the country. In most countries of the world, reserves are built to last for at least one month in case of fuel supply cut, but Nigeria does not have reserve that can last for one week.”

Meanwhile, apparently making reference to the outburst of Deputy Comptroller of Customs, Mr Julius Ndubusi Nwagwu, on the N45 billion the Nigeria National Petroleum Corporation, NNPC, was owing the Customs Service, Group Managing Director of the Corporation, Mr Austen Oniwon, at the hearing, promised that the debt would be settled after reconciliation.

Oniwon in a response to a question on the debt, responded that the corporation would pay, but after it must have carried out some reconciliation processes with the Customs.

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