More controversies as NNPC contradicts Osinbajo, says govt pays for fuel subsidy

The Nigeria National Petroleum Corporation (NNPC), on Tuesday, rescinded Vice President Yemi Osinbanjo’s statement over the payment of fuel subsidy, saying the federal govoernment is responsible for the payment.

NNPC Chief Operating Officer (COO) in charge of Refineries, Anibor Kragha, made the disclosure at the continuation of the Ad-hoc Committee of the House of Representatives investigating the status of the country’s four refineries and Turn Around Maintenance (TAM) in Abuja.

Kragha’s statement which totally contradicts that of the Vice President is coming a few months after Vice President Yemi Osinbajo claimed, while on a visitation tour to Oando and Total fuel depots in Apapa area of Lagos, that NNPC and not the Federal Government is in charge of paying for the fuel subsidy.

Osinbajo had earlier said since the corporation is directly involved in trading of fuel, it bears the cost. According to him, “NNPC is trading fuel; the Federal Government is not, at the moment, paying for any subsidy. NNPC is trading, if you are buying and selling fuel, you would have to be able to pay for it. So it’s not a question of government provision for subsidy, the Federal Government, at the moment isn’t paying any subsidy.”

The positions of the government and the national oil company further deepens the controversy surrounding payment of subsidy by the present administration.

Speaking on the failure of the corporation to conduct periodic maintenance on the refineries in due time, the lawmakers expressed displeasure and demanded explanation on why the maintenance of the refineries could not be done despite the huge amount of money spent on fuel subsidy monthly.

Read also: NNPC now owns 14% market share of petroleum products retail business- Baru

“When the issue of TAM came up, you said it should be after two years, but it’s now about 10 years. You said the reason is that you don’t have funds, but you have money to pay for subsidy, which runs into trillions that can build refineries. Where do you get money to pay for subsidy then?” Muhammad Datti (APC, Kaduna), Chairman of the Ad-hoc Committee queried.

Responding to the allegation, Kragha revealed that the refineries could not be maintained as and when due because of lack of funds, he disclosed that it was the Federal Government that is responsible for the payment of fuel subsidy and not the corporation.

These statements have kept eyebrows of Nigerians raised on who is saddled with the responsibility of payment of fuel subsidy after the Federal Government had announced its removal in 2016.

Meanwhile, the Ad-hoc Committee instructed the NNPC to furnish the committee with all relevant documents needed for the investigation.

The panel requested that the corporation produce list of all its contractors for the Turn Around Maintenance (TAM); the selection method for the contractors to know if due process was followed, certificates of completion by the companies; audited accounts of the four refineries for the five years and their budgets for the same period.

“We have agreed within the committee that you should be given one week to submit all the documents. You should make full submission on the documents,” Datti said.

The ad-hoc panel also called on officials of the Nigeria Extractive Industry Transparency Initiative (NEITI), Accountant General of the Federation, Anthony Ayene, over billions of naira spent on the Turn Around Maintenance (TAM) of the refineries with no visible improvement.

The hearing, however, led to serious argument between the lawmakers and officials of the Nigeria National Petroleum Corporation (NNPC).

Also, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has hinted that certain operational model have to be adopted for the optimal performance of the four refineries.

Timothy Jayoba, who was speaking on behalf of PENGASSAN’s Central Working Committee, proposed modifications of the Nigeria Liquefied and Natural Gas (NLNG) model and the NNPC financing model, adding that the models modification would enable government to have a stake but the refineries would be run by private individuals to ensure full operations.

Jayoba, while highlighting the refineries’ problems, stated that the four refineries were “running on a faulty business model,” adding that the Port Harcourt Refinery had maintenance three times instead of 14; Warri Refinery had four instead of 20 and Kaduna Refinery had five instead of 19.

By Oluwasegun Olakoyenikan….

 

RipplesNigeria… without borders, without fears

Click here to join the Ripples Nigeria WhatsApp group for latest updates.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now