Friday , August 19 2022
Home / Business / Local Business / Reps Probe Petrol Subsidy Under Buhari, Allege $7 Billion Diversion

Reps Probe Petrol Subsidy Under Buhari, Allege $7 Billion Diversion

Spread the love

The House of Representatives has set up an ad-hoc committee to investigate the petroleum products subsidy regime under President Muhammadu Buhari.

The lawmakers asked the committee to carry out the probe from 2017 to 2021.

This followed the adoption of the motion by Rep Sergius Ose Ogun.

Ogun, in his motion, expressed worries that the subsidy regime has been “unscrupulously” used by the NNPC Ltd and other critical stakeholders to subvert the nation’s crude oil revenue to the tune of over $10 billion, with records
showing that as at 2021, over 7 billion US dollars in over 120 million barrels have been so diverted.

He also said there exist evidence that subsidy amounts are being duplicated, adding that “subsidy is charged
against petroleum products sales in the books of NNPC Ltd as well as against crude oil revenue in the books of NAPIMS to the tune of over N2 trillion.

He expressed worries that component costs in the petroleum products subsidy value chain claimed by the NNPC Ltd is “highly over-bloated while the transfer pump price per litre used by the NNPC Ltd 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 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)”, he said.

He informed the House 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.

Ogun further said that as of 2002, the installed capacity of Nigeria’s local refineries stood at 445,000 barrels per
day, adding however, that their capacity utilization began to nosedive and eventually fell completely to zero due to the ineffectiveness and alleged corruption of critical stakeholders in the value chain.

Ogun said 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.

Speaker of the House, Femi Gbajabiamila, while ruling on the motion, said the issue of subsidy regime has been a thing of concern, describing the motion as very important.

He directed the Deputy Speaker of the House, the House Leader and the Chief Whip to come up with a view crack team that probe the subsidy regime in the country.

About Charles Igbinidu

Charles Igbinidu is a Public Relations practitioner in Lagos, Nigeria

Check Also

Why I Declined Tesla’s Offer To Get Raw Materials From Nigeria – Minister

Spread the love The Minister of Mines and Steel Development, Olamilekan Adegbite, has said he …

Leave a Reply

Your email address will not be published.