The Nigerian National Petroleum Corporation (NNPC) has been accused of using the subsidy regime to divert about $10 billion.
But where has this huge sum been warehouses or what has it been used for? That is the $10 billion question, giving that the official exchange rate as of June 30, 2022, would equal Four trillion, one hundred and fifty-one billion naira (N4, 151,000,000,000).
A House of Representatives member, Sergius Ose-Ogun, made the startling disclosure, which for years had been within the realms of whispers, given that there has been no corresponding statistics that more cars have been purchased by Nigerians, or fuel supply in the country has been regular.
The Representative stated that the NNPC has been inflating cost of fuel subsidy by providing wrong daily consumption figure of Premium Motor Spirit (PMS), adding an extra 20 million to 60 million to the number.
The lawmaker disclosed this on the floor of the House on Wednesday, resulting to an agreement that the House should investigate the subsidy regime under President Muhammadu Buhari between 2017 to 2021.
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Ose-Ogun said he’s aware that the “component costs in the petroleum products subsidy value chain claimed by the NNPC Limited are highly over-bloated while the transfer pump price per litre used by the NNPC Limited in relation to PPMC is underquoted as N123-N128 instead of N162-N165 and this fraudulent under-reporting of N37-N39 per litre translates into over N70 billion a month or N840 billion a year;
“Worried that the consumption rate of Petroleum Motor Spirit(PMS) is 40 million to 45 million litres per day, however, the NNPC Ltd 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);
“Also worried that the subsidy regime has been unscrupulously used by the NNPC Ltd & other critical stakeholders to subvert the nation’s crude oil revenue to the tune of over $10B,with records showing that as at 2021, over $7B in over 120m barrels have been so diverted;
“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 said during plenary on Wednesday.
After eight weeks of investigating, the lawmakers are expected to reconvene on the matter.
Meanwhile, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has paid the sum of N74 billion to oil marketers as bridging claims in the past seven months.
The authority made this known in a statement signed by Mr Kimchi Apollo, the General Manager, Corporate Communications, NMDPRA, on Wednesday in Abuja.
“So far, the authority paid N71,233,712,991 bridging claims and another N2,736,179,950.84 freight differentials to oil marketers as of June 6, 2022,” Apollo said.
He said the authority’s attention was drawn to allegations made by the Independent Petroleum Marketers Association Nigeria (IPMAN), Suleja Branch) on product scarcity as a result of non-payment of bridging claims.
Apollo said the Major Oil Marketers Association of Nigeria (MOMAN) received N9.96 billion while IPMAN members were paid N42.30 billion.
He expressed NMDPRA commitment to ensuring a safe, efficient, and effective conduct of midstream and downstream petroleum operations.
▪︎ Additional reports by NAN.