Customs faults NNPC’s data on subsidy payments, daily fuel consumption

The Nigerian Customs Service (NCS) has claimed that the Nigerian National Petroleum Company (NNPC) Limited (previously known as the Nigerian National Petroleum Corporation) is unable to demonstrate that the amount of Premium Motor Spirit (petrol) consumed daily in the nation justifies the over N6.34 trillion in annual subsidy payments made on the good.

Col. Hameed Ali (retd.), the Customs Comptroller-General, made this call on Thursday, during his presentation to the House of Representatives Committee on Finance at the continued hearing on the proposed 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper in Abuja.

Ali claimed that the nation’s oil company was supplying more than 38 million litres of PMS per day and that the NNPC cannot scientifically back up its claim of a 98 million litres/day consumption rate.

The committee had questioned Ali on a similar deficit in the 2023 budget that ranged from N11 trillion to N12 trillion and was outlined in the 2023-2025 MTEF/FSP.

The deficit in the 2023 fiscal year is expected to range between N11.30 trillion and N12.41 trillion, according to the federal government’s proposed budget, which has estimates totaling N19.76 trillion.

Read also: Reps summon finance minister over subsidy payments

Zainab Ahmed, the minister of finance, testified before the committee earlier on Monday and expressed concern that the government might not be able to fund capital projects from the treasury in the coming year due to declining tax revenues and the annual payment of N6.34 trillion in fuel subsidies.

However, Ali, in his submission, said “I remember that last year we spoke about this. Unfortunately, this year, we are talking about subsidy again. The over N11tn we are going to take as debt, more than half of it is going for subsidy. The issue is not about smuggling of petroleum products. I have always argued this with NNPC.

“If we are consuming 60 million litres of PMS per day, by their own computation, why would you allow the release of 98 million litres per day? If you know this is our consumption, why would you allow that release? Scientifically, you cannot tell me that if I fill my tank today, tomorrow, I will fill the same tank with the same quantity of fuel. If I am operating a fuel station today and I go to Minna depot, lift petrol and take it to Kaduna, I may get to Kaduna in the evening and offload that fuel. There is no way I would have sold off that petrol immediately to warrant another load. So, how did you get to 60 million litre per day? That is my problem.

“The issue of smuggling: if you release 98 million litre in actual and 60 million litres is used, the balance should be 38 million litres. How many trucks will carry 38 million litres every day? Which road are they following and where are they carrying this thing to?”

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