House of Representatives has resolved to set up an ad-hoc committee to investigate the Petroleum Products Subsidy regime in Nigeria from 2017 to 2021.
This resolution followed the adoption of a motion sponsored by Sergius Ose Ogun.
The Speaker, Femi Gbajabiamila, was going to set up the committee yesterday during plenary, but said after consultations it would be done on Thursday (today) as there was need to take time to select a crack team due to the importance of the matter.
The committee will be given eight weeks to carry out the assignment and report back to the House for further legislative action.
Moving the motion, the sponsor, Ogun, noted 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.
He said 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.
He also said 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 trade by barter basis described as Direct Sales Direct Purchase (DSDP) arrangement.
He expressed concerns 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).
Ogun said, “The House is also aware that component costs in the petroleum products subsidy value chain claimed by the NNPC Limited is 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 70 billion naira a month or 840 billion naira a year.
“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.”
We’ve got the edge. Get real-time reports, breaking scoops, and exclusive angles delivered straight to your phone. Don’t settle for stale news. Join LEADERSHIP NEWS on WhatsApp for 24/7 updates →
Join Our WhatsApp Channel
