The Senate on Tuesday resolved to invite the Group Chief Executive Officer (GCEO) of Nigeria National Petroleum Company Limited (NNPCL) to brief them on its under recovery expenditures and the company’s position on subsidy removal of the present administration.
This was coming after the adoption of a motion on the “Need to Investigate the Controversial Huge Expenditure on Premium Motor Spirit (PMS) under the Subsidy/Under Recovery Regime by the Nigerian National Petroleum Company Limited (NNPCL)”.
The motion was sponsored by Senator Chinwuba Patrick (Imo East).
The Senate also resolved to “mandate the Committee on Downstream Petroleum Sector (when constituted) to constantly monitor, scrutinize and approve Midstream and Downstream spending of the NNPCIL; and
“Urge the NNPCL, in conjunction with some major international oil companies (IOCs) in Nigeria, to form three different consortium and build three refineries, one each to stabilize our oil market, give value to our currency and stabilize our economy.
Earlier Senator Chinwuba noted that the Federal Government, in its fight against corruption and in order to plug the presumed highly proliferated leakages, wastages and slippages surrounding the fuel subsidy as well as in an attempt to end the controversial subsidy regime, on May 11, 2016, announced increase in fuel pump price from N87 to between N135 and N145 per litre.
He said at the inauguration of the present Government on May 29, 2023, the President took a bold step to announce the total removal of “fuel subsidy”, noting that the scheme has “increasingly favoured the rich ¾more than the poor”.
According to the Imo senator, the Federal Government’s interest in exiting the subsidy regime was in line with its policy to reduce cost of governance, and desire to eliminate corrupt practices surrounding the scheme through diversion and smuggling of the products into border countries as well as introduce fair competition in the Downstream Sector.
“NNPCL within the period of subsidy exit attempt, substituted the term “subsidy” with “under recovery” without any recourse to the National Assembly or supervision by any other arm of the government.
He observed that “while NNPCL within 10 years, 2006 and 2015, claimed about N170 billion as under recovery, the same NNPCL within 13 months, January 2018 to January 2019 claimed a whopping sum of N843.121billion as under recovery
“Concerned that the then Petroleum Product Pricing Regulatory Agency (PPPRA) published in its website, figures that contradicted NNPCL’s daily under recovery claims within the same period;
“The Federal Government appropriated N1.42 trillion and N4.3 trillion for petrol subsidy in 2021 and 2022 respectively while N3.6 trillion was appropriated for petrol subsidy for 6 months ending in June, 2023
“Worried that the NNPCL’s arbitrary and unsupervised direct deductions from the country’s crude oil revenue without recourse to any enabling law contravenes Section 89 (1c and 1d) of the 1999 Constitution (as amended) and does not speak well of the good intentions of the Federal Government, especially in its fight against corruption.
“Also worried that the uninvestigated and alarming cost of under recovery/direct deductions by NNPCL without necessary checks, has led to great misunderstanding of the Government’s good intension on subsidy removal”.