The House of Representatives has decided to probe payments for subsidy on petroleum products, especially petrol under the administration of President Muhammadu Buhari.
The Ad Hoc Committee to Investigate the Petroleum Products Subsidy from 2017 to 2021 will be formed by Speaker of the House, Femi Gbajabiamila, and it will have eight weeks to provide a report to the House for future legislative action.
The investigation is based on a resolution by a member of the House, Sergius Ogun that was overwhelmingly approved by the lawmakers on Wednesday and it’s titled “Need to Investigate the Petroleum Products Subsidy Regime in Nigeria from 2017 to 2021.”
Ogun pointed out that Section 88 (1) and (2) of the 1999 Constitution gives the National Assembly the right to look into the actions of any authority that executes or oversees the administration of laws passed by the National Assembly.
He also pointed out that the Petroleum Midstream and Downstream Regulatory Authority is charged with overseeing and regulating technical and commercial midstream and downstream petroleum operations in Nigeria under Section 32 of the Petroleum Industry Act, 2021.
According to the legislator, as of 2002, the Nigerian National Petroleum Corporation purchased 445,000 barrels per day of crude oil at world market rates in order to supply petroleum products for domestic consumption.
Ogun stated that the NNPC, now known as Nigerian National Petroleum Company Limited, found it more convenient to export domestic crude in exchange for petroleum products on a trade-by-barter basis, otherwise known as a Direct Sales Direct Purchase arrangement, due to the decline in the production capacity of the refineries.
The lawmaker noted that the component costs in the petroleum products subsidy value chain claimed by the NNPC were significantly exaggerated, while the transfer pump price per litre used by the NNPC in relation to PPMC was under-quoted as N123-N128, instead of N162-N165.
He said: “The House is worried that the consumption rate of 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.”
“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 $10bn, with records showing that as at 2021, over $7bn 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 the NNPC as well as against crude oil revenue in the books of NAPIMS to the tune of over N2tn.”
This article was originally published on Naija News