…. Approves N129bn subsidy payment to 67 oil marketers
The Senate Thursday said that the country spent over N11 trillion as payment for outstanding fuel subsidy claims in the last six years.
Chairman, Senate Committee on Petroleum Downstream, Senator Kabiru Marafa, stated this while presenting the report of the committee on downstream petroleum sector.
The Zamfara Central senator did not however give details of how the N11 trillion was spent on subsidy claims.
The report was specifically on “Promissory note programme and a bond issuance to settle inherited local debts and contractual obligations to petroleum marketers.”
The disclosure came as the upper chamber approved the payment of N129 billion as subsidy claims arrears to 67 oil marketers.
The approval followed the adoption of the report by the upper chamber.
Marafa told the Senate that the approval brought to closure the issue of subsidy claims arrears by oil marketers.
Some of the oil marketers included: AA Rano, Ascon, Aiteo, Total, MRS Oil & Gas Limited, Sahara Energy, Oando PLC, A-Z Petroleum, Masters Energy, Northwest Petroleum, Fresh Enery, Forte Oil, Integrated Oil among others.
The Senate had on Tuesday approved the sum of N69 billion as oil subsidy claim for Premium Motor Spirit for 19 oil marketers.
Marafa observed that there were differences in submissions made by the Federal Ministry of Finance, Petroleum Products Pricing Regulatory Agency (PPPRA) and oil marketers.
The report pointed out that all the subsidy arrears claims were based on three inter-related elements: subsidy, forex differentials and bank interests on unpaid claims.
“That the recent request computation is based on one of the already identified elements (forex differential).
“That due to scarcity of Forex within the period, Oil Marketing Companies were allowed to source Forex outside CBN rate to enable them meet the country’s petroleum products demand.
“That NNPC Retail get their petroleum product allocation directly from PPPMC at already subsidized rate and so does not require forex to transact its business,” the report seen by read.
Some of the oil marketers and the amount approved for them include: Total Nigeria PLC N13.7 billion, Northwest Petroleum N11.4 billion, Masters Energy N10 billion, MRS Oil PLC N8.8 billion and Sahara Energy N8.4 billion.
Others are: MRS Oil & Gas Limited N6.3 billion, Nipco PLC N4.2 billion, Forte Oil N3.9 billion, DEEJONES Petroleum & Gas N4.1 billion, Emadeb N4 billion among others.
Senators who contributed before the report was adopted lamented that the country was bleeding paying outstanding subsidy claims.
For them, the continuous payment of subsidy claims would hurt the economy.
The lawmakers urged the Federal Government to build new refineries to put an end to fuel subsidy payment.
Chairman, Senate Committee on Public Accounts, Senator Matthew Urhoghide expressed concern that more subsidy claims would come up in the Ninth Assembly because “the computations were not properly done”.
Deputy Senate President, Ike Ekweremadu, who presided, said that the Nigerian National Petroleum Corporation (NNPC) charge subsidy claims on the Consolidated Revenue Fund of the Federation, a development he described as unconstitutional.
Ekweremadu said, “I am also happy to note that we are coming to a closure on the issue of this outstanding payment on subsidy claims. We should begin to think of the best way to deal with the subsidy issues.
“The frightening aspect of it is that the NNPC now charge subsidy on the Consolidated Revenue Fund of the Federation. What they do is that the issue of subsidy is now in the first-line charge on our oil revenue, which is extremely dangerous because that is completely unknown to our constitution.
“But the implication therefore is that those expenditures are never appropriated. So it is a possible area of conflict between the Executive and the Parliament.
“I do hope that the next Assembly will be able to sit down with the Executive in other to address this issue without creating unnecessary tension.
“NNPC needs to also caution itself in that respect so that they don’t encroach on the appropriation responsibilities of the National Assembly”.
