The Federal Government has been urged by the House of Representatives to stop providing subsidies for all petroleum-based products, not just Premium Motor Spirit, also known as petrol.
This call comes in response to the recent increase in the pump price of gasoline products caused by the cessation of the PMS subsidy as well as the resurgence of queues at various gas stations across the nation.
Nigerian National Petroleum Company Limited announced a change to the pump price of fuel early on Wednesday to take into account market conditions.
After that, fuel stations in Lagos, Abuja, Ogun, and other areas of the nation changed their tank prices to reflect the new rates, which ranged from N600 to N800.
To mitigate the effects of the elimination of the PMS subsidy on Nigerians, the House encouraged the government to implement palliatives and other measures.
The House Ad Hoc Committee on the Need to Investigate the Petroleum Products Subsidy Regime in Nigeria made these recommendations, which the MPs discussed as a Committee of the Whole and adopted in plenary on Thursday.
Ibrahim Aliyu, the committee’s chairman, presented the report on Wednesday, 11 months after the panel was tasked with creating it.
The committee recommended that “the Federal Government should outrightly remove subsidies on all petroleum products.”
It also recommended that “the Federal Government should immediately design measures and palliatives to cushion the effects of the subsidy removal for Nigerians, effective from this year 2023, through the provision and procurement of Compressed Natural Gas buses as an alternative transport system with cheaper fuel consumption,” it remarked.
The panel stressed that the government should “introduce intermodal, regional and national transport systems to ease mass movement of people across the country.”
In addition, the committee recommended that the Nigerian Midstream and Downstream Petroleum Regulatory Commission should “issue stricter and most appropriate regulations as provided in the Petroleum Industry Act to ensure that Nigerians are not short-changed through profiteering.”
The lawmakers also requested that the Joint Venture Contracts, the Federal Inland Revenue Service, and the NMDPRC convene a reconciliation meeting to discuss how the Nigerian National Petroleum Company Limited, Joint Venture Contracts, and the NMDPRC are using their crude entitlements.
The report partly read, “With the total deregulation of the sector, all the agencies involved in crude lifting/security should have a representative with the Nigeria Navy as a lead agency to physically assess and document daily crude production and lifting:
“The committee also recommends that the Federal Government should, as a matter of urgency, liaise with the National Assembly to fashion out critical areas of economic development, in which the additional revenue from the proposed subsidy removal will be appropriately utilised.
“A further investigation, through a forensic audit by the Office of the Auditor General for the Federation, be made to ascertain whether the N413billion borrowed from the Central Bank of Nigeria for subsidy payments was refunded after the passage and assent of the 2015 budget as earlier approved by the President and the report of the Auditor General to be submitted to the House for further legislative action.
“With the subsidy removal, the Federal Government should forthwith suspend all Direct Sales Direct Purchase (oil swap) contracts. NNPCL should act by the provision of the PIA to ensure that the country is not sub-changed in both production, lifting, and sales of crude.
“The committee further recommended that the Nigeria Customs Service and the Weight and Measures Department of the Federal Ministry of Industry, Trade and Investment be equipped to ascertain the actual daily crude oil lifting from the country for proper checks and balances,” the report maintained.
Another recommendation was that the Nigeria Extractive Industries Transparency Initiative Act, 2007, be amended by the National Assembly to be in tune with global best practices.
The panel further recommended that the National Assembly, especially the House standing or ad hoc committees in the 10th Assembly be saddled with such responsibility to conduct “a full-scale investigation on the defaulting oil companies and MDAs that have not met the expectations of the committee to ascertain their level of involvement or otherwise and further protect the commonwealth of the country.”
On June 29, 2022, the House decided to look into payments for subsidies on petroleum products, particularly Premium Motor Spirit, also known as petrol, under the previous administration presided over by Major General (Ret.) Muhammadu Buhari.
The group, whose investigation encompassed the years 2017 to 2021, was established by the Speaker of the House, Femi Gbajabiamila, with the instruction to report back to the House within eight weeks for additional legislative action.
The investigation was based on a proposal that Sergius Ogun, a member of the House, moved and the lawmakers unanimously approved on Wednesday. The motion was headed “Need to Investigate the Petroleum Products Subsidy Regime in Nigeria from 2017 to 2021.”
