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Buhari paid N450bn fuel subsidy —Senator Marafa

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Buhari paid N450bn fuel subsidy —Senator Marafa

Senator Kabiru Marafa, chairman of the Chairman, Senate Committee on Petroleum (Downstream), on Wednesday told his colleagues that the Federal Government has so far paid N450 billion as subsidy on Petroleum Motor Spirit (PMS), popularly known as fuel.

He said the said amount paid by the Nigerian National Petroleum Corporation (NNPC), was not approved by the National Assembly as required by law.

He said President Muhammadu Buhari, who doubles as the substantive Minister of Petroleum Resources, gave the approval that subsidy be paid on fuel.

The shocking report submitted by his Senate committee, indicated that the Federal Government spent a total of N784 billion on alleged fraudulent practices in the import of petroleum products in 2017.

The report of the panel put the total surplus in the volume of petroleum imported in 2017 by both the Nigerian National Petroleum Corporation (NNPC) and the marketers at 5.9 billion litres, which, when multiplied by the N133 landing, cost gives the sum of N784 billion.

It noted that shortages in the volume of fuel claimed to have been supplied by the NNPC and the independent marketers, were major factors that led to the scarcity of fuel nationwide.

The Senator Kabiru Marafa-led committee, explained that “since the NNPC said it is importing 30 cargoes of 30,000MT (Minimum) of PMS monthly, through the DSDP Scheme, it means NNPC is importing 30 x 30,000 x 1,341 = 1,206,900,000 litres of PMS monthly.

“Therefore, at an average consumption of 35 Million litres/ day, NNPC said the country consumes between 27-30 million litres/day from January to September and 30-40 Million litres/day from September to December, 2017.

“From the above figures, NNPC’s monthly supply is supposed to last the country for about 35 days at 35 Million litres/ day.”

The report further pointed out that “the marketers, on the other hand, received from Government about $1,669,180,182 at Central Bank of Nigeria (CBN) rate of N305 to a dollar to import Petroleum Motor Spirit (PMS) from January to August, 2017. This means that marketers were supposed to bring into the country about 3.8 billion litres of PMS at a landing cost of N133. In other words, marketers’ supply were supposed to serve the country for about 109 days at 35 million litres daily in 2017.

“The implication is that NNPC has five days surplus every 3 month, 60 days surplus in a year, added to the marketers’ 109 days supply gives a total of 169 days supply surplus of 35 million litres/day or 5.9 billion litres. The question is who consumes this surplus before we ask of Subsidy?”

The committee further listed some causes of fuel scarcity to include supply gap caused by refusal of some Direct Sale Direct Purchase (DSDP) contractors to take October crude oil cargoes because of the fear of incurring huge losses occasioned by the rise in the price of PMS in the international spot market, which is always the case during winter months.

Read also: $1.6BN FRAUD: Omokore’s accounts were closed by worldwide freezing order – Witness

The report also listed as a factor, the fact that NNPC refused to listen to genuine complaints made by the marketers during the signing of the DSDP contract.

Other factors that caused the scarcity according to the panel, include “withdrawal of marketers from importation because of the rise in the international price of PMS, occasioned by the rise in the price of crude oil and the effect of winter; the claims by the oil marketers of non-payment of subsidy arrears by the Government to the tune of N800billion incapacitated their operations through the dearth of operational capital; rumours of impending pump Price increase by Government in December or 1st week of January, that went viral on social media”.

The report further noted that massive smuggling across our borders was a major cause and added that the NNPC claimed that about 4,600 trucks were smuggled out of the country during the crisis period.

Another cause, according to the panel, is the lack of harmonious working relationship between the Ministry (headed by the Honourable Minister of State) and NNPC (headed by Honourable Minister of State) and NNPC (headed by the GMD) as evidenced even in their presentations; while the Minister attributed the crisis to supply gap, the GMD was quick to deny any gap in supply.

“Attitude of some bad marketers and some Nigerians who saw the crisis as an opportunity to make more money was also listed,” the report noted.

Other causes of scarcity according to the report “are the abysmal performance of the nation’s refineries despite the huge investment in their repairs; the issue of sabotage, though could not be established, but could still not be completely ruled out especially when some newspapers reported large deposits of hoarded petroleum products discovered by security personnel across the country; and trucking as the only means of transporting petroleum products across the country coupled with bad roads, distance and other challenges affects distribution of products

Meanwhile, allegations of corrupt practices in the oil industry, as well as persisting scarcity of petroleum products across the country, generated serious protests and criticisms against the management of the NNPC on the floor of the Senate on Wednesday.

For failing to meet up with its expectations, the upper chamber rejected the report submitted by its Petroleum Resources (Downstream) committee which earlier investigated the matter.

The Senate declared that what the committee did was not a true representation of its integrity. It said the failure of the Marafa-led committee to investigate and expose the new wave of subsidy imposed by the Federal Government, despite the absence of an approval by the National Assembly to that effect was unacceptable.

The Red Chamber instructed the committee to go back and do a more thorough investigation on the real volume of petroleum products imported into the country, as well as issues leading to the scarcity.

The Senate, however, directed its committee on Public Account to conduct an open investigation on reports of imposition of new fuel subsidy regime without the approval of the National Assembly.

The motion on the need to probe the re-introduction of subsidy was sponsored by Senator Dino Melaye who believed that the main issue that the Senate should concern itself with is the alleged illegal subsidy.

He informed his colleagues that it would be an act of gross irresponsibility to spend money without appropriation. According to Melaye, if all these blazing acts of corruption is allowed to persist in an administration that should be fighting corruption, it means “we are not fighting corruption, but entrenching abuse of power.”

He suggested that the executive arm of government must be made to refund all monies it spent without appropriation by both chambers of the National Assembly.

Senator Solomon Adeola, noted that it was unfortunate that the same fraud that had always been perpetrated in the oil sector has persisted in the All Progressives Congress (APC) led government.

“I have information that the NNPC overshot its budget by N3 trillion in four years. Who gave the approval and why?” Adeola queried.

On why the report of the committee was rejected, Senate Minority leader, Godswill Akpabio, submitted that “the report does not represent the integrity of the Senate.”

In a comment at the end of the debate, Senate President, Bukola Saraki, noted that though the committee’s report attempted to address issues of scarcity and the volume of petroleum products imported and consumed daily, it was not comprehensive enough.

According to Saraki, “if we are consuming 27 million litres per day and the NNPC is bringing in 40 million litres per day, what about the difference?”
By Ehisuan Odia…

 

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