Petrol Subsidy, Subsidy pressures eroding fiscal space — CardinalStone
A fuel pump (stock photo).

By Levinus Nwabughiogu – Abuja

Details of how N4.194 trillion was paid as subsidy to oil marketers between January, 2017 and June, 2022 have emerged.

It will be recalled that the House of Representatives last week resolved to probe the payment.

According to documents from the office of Accountant General of the Federation (oAGF), the subsidy payments/deductions from the Federation Account computed by the oAGF through the Federation Account Department within the time under investigation indicated that the sums of N126.539 billion was paid from January-December 2017.

Similarly, other details showed that N691.586 billion was paid from January-December 2018; N537.209 billion paid from January-December 2019; N133.625 billion paid from January-December 2020; N1.159 billion paid from January-December 2021 while  N1.545 trillion was paid between January and June 2022.

The details were contained in the 2-page document submitted by the Director Overseeing the oAGF, Mr. Sylva Okolieaboh to the House of Representatives’ Ad-hoc Committee inaugurated to ‘Ascertain the actual daily consumption of Premium Motor Spirit (PMS) in Nigeria’, chaired by Hon. Abdulkadir Abdullahi.

The committee in a meeting on Tuesday which uncovered subsidies claimed by oil companies while NNPC was the sole importer of PMS however queried the presentations made by NNPC subsidiaries.

Abdullahi said: “It is surprising now to see that oil companies are reeling out figures of importation, in fact, more than what NNPC imported in 2020. I need some clarifications and if that happened, do they import it without any form of subsidy or what actually happened?”

Responding, the Executive Secretary of Nigeria Extractive Industries Transparency Initiative (NEITI), Mr. Ogbonnaya Orji said NNPC was in charge of most of the importation.

“Why NNPC took charge of most of the importations, we are also aware of other partnerships and arrangements they have with IOCs. But I will like the Director Technical Services to speak more on that.

“NNPC had arrangements with some of the oil marketers as a stop-gap for importation of PMS in 2020 but what we would do is we will provide you information on those things imported and the vessels and everything, so that you will be cognizant of those that did the importation. Like I said, this is the data that we got from PPPRA then and NNPC also, so we collated those data and from the importers themselves.

“So we will provide you with the information of all those that constituted the companies that did those importations during that period which is about 16 billion litres.”

Orji however stated that only the PPPRA could give the differentials on the subsidy payments.

The committee also directed the oAGF Director to provide the statement of accounts of the Federation Account alongside the Crude Oil Account statements to help it ascertain the actual volume of litres of premium motor spirit (PMS) distributed by the NNPC from which N4.194 trillion fuel subsidy deductions from the Federation account.

Speaking at the meeting, a member of the House committee, Hon. Uzoma Nkem-Abonta (PDP-Abia) expressed dissatisfaction with the refusal of the regulatory agencies to provide the details of actual volume of PMS consumed daily in the country

“Could it be the reason why all the Accountant Generals are being sacked or removed, even this acting one for reason of fraud?.

“Subsidy which is the topical issue in Nigeria, we are seeing the amount you paid in subsidy without getting the correspondent volume and you are arguing. So the subsidy you paid is meant for, what volume?

“That is the basis for this investigation. And I ask, could that be the reason why most of the Accountant generals are removed? I’m not the one removing them, they are removing them on issues based on fraud and why are you taking exception, is it a lie that Accountant generals are being removed for fraud?

“While stressing the need to ensure compliance with the Committee’s position, Hon. Nkem-Abonta said: “Mr. Chairman, I have a motion, you are a signatory to the Federation Account, you are and I move that for us to know the details of what we are doing, that we do not move in the dark light, that for us to know the volume, that he should get us the Crude sale account, he should give us PPMC sales account, he should give us PMS sales account and any of the accounts maintainedon subsidy. So that we would be able to look at the account, the volumes andthen do this that’s the only way we can, I so move”, Abonta said.

In his remarks earlier, the Chairman of the Ad-hoc Committee, Hon. Abdullahi observed that: “the money that NNPC is generating suppose to be paid into the Federation Account, you know this money is not only for the Federal Government, it’s for Federal Government, it’s for Abia State, it’s for Ningi LocalGovernment, the Three Tiers of Government and other deductions.

“But before it comes, NNPC will withdraw it, they are brandishing one Supreme Court judgement or whatever. You know it’s also contestable becausethe opinion is that the judgement is not saying that you should grab from the source, No. pay to the government, pay to the Consolidated Revenue Fund (DRF) and then just like the Accountant General is paying to the Three Tiers of Government, that is how it will also pay to you and then you pay the subsidy.

“That is the way it would be more transparent and I think peoplewill be satisfied that the right thing is being done. But before the thingentered into the Federation Account, they (NNPC) removed it at source. It’s verywrong, it’s unconstitutional, it’s in breach of the constitution.

“It suppose to be in the Federation Account and as they are doing transfers. They will now bring you the appropriation approved by the National Assembly that you should take onepoint something trillion for subsidy.

“Yes, that is how we approve money for Federal Ministry of Education but do Federal Ministry of Education and grab it from source? Even the revenuethey generate they pay to the CRF then you now transfer to them, I think thatis what suppose to be done.

“So you are going to take this back and rework the paper andgive us the volume against each value that is presented here. That way it willbe of help to the committee and we will really appreciate the office if you canbe able to do that,” he noted.

He demanded the oAGF to obtain relevant documentary evidence from NNPC on the N37 billion removed from the proceeds that it ought to remit.

“What is it meant for? If they say it’s for subsidy, okay how litres and the volume, they should give you and then you supply us.

“We must have it from different sources because everybody is saying it’s a difficult thing, we don’t have this, we don’t have that. Look at NUPENG they brought 60 million litres butthere is no details. We really need to be serious about it, even for our planning purpose,” he said.

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