July 23, 2017

Nigeria govt. wastes N667bn yearly subsidizing petrol not used by Nigerians

The Nigerian government paid a whopping N667 billion subsidizing millions of litres of petroleum that wasn’t used by Nigerians, Premium Times have revealed.

According to the Times, Executive Secretary of the Petroleum Product Pricing Regulatory Agency, Mr. Reginald Stanley had on Wednesday told the House of Representatives Ad-hoc committee investigating the subsidy regime that the country pays to subsidize 59 million litres of petroleum daily, when it only needs 35 million litres.

The top official said the government had been subsidizing this 24 million litres for years, enriching corrupt NNPC officials and oil marketers, who then smuggled most of the product into other countries.

Stanley said on Wednesday that prior to subsidy removal on 1 January, the government had been paying the N76 subsidy per litre on the unnecessary 24 million litres, translating to N1.9 billion a day and N667 billion a year.

Mr. Stanley failed to explain why the nation was subsidizing fuel it didn’t use or need, adding that computation were not based on actual user data, but on gross domestic product indicators. Lawmakers investigating the subsidy directed the PPPRA to send in a list of importers and provide details of importation of fuel from 2006 to date, vowing to unearth the details of the deal.

“Because if the subsidy you pay is for 59 million litres per day and the consumption is 35 million litres per day, then you are talking of 24 million litres which Nigerians are paying for but for which they do not consume,” said Farouk Lawan, who chairs the house ad hoc committee.

Both the PPPRA and the Nigeria National Petroleum Corporation have been accused of abusing government subsidy on petrol, and protecting the infamous “cabals” guilty of corrupting the subsidy system.

NNPC was also accused of participating in importation without documentation. The Nigeria Customs Service made the claim on Tuesday, saying the corporation’s actions made it difficult for customs to determine the actual amount imported. The corporation was further accused of illegally deducting subsidy claims at source, at times, overpaying the claims.

The PPPRA boss denied on Wednesday the agency was involved in paying marketers, while the NNPC Group Managing Director, Austin Oniwon, told the lawmakers the corporation acted within the law in deducting the monies at source, Premium Times noted.

Mr. Oniwon said: “We don’t take money from the federation account and we do not intend to take money from the federation account. I only deduct what is authorized by the Petroleum Products Pricing Regulatory Agency,” he said.

Via Premium Times

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