The House of Representatives on Wednesday passed a resolution to investigate the petroleum products subsidy regime of the Federal Government from 2017 to 2021.
The resolution was passed during plenary in Abuja presided over by the Speaker, Rep. Femi Gbajabiamila.
An ad-hoc committee will be handle the probe and the members will be announced by the Speaker on Thursday. The investigating will last for eight weeks.
A member from Edo State, Rep. Sergius Ogun moved the motion on the matter and secured the endorsement of the House.
The motion reads, “The House notes that section 88 (1) and (2) of the Constitution of the FRN (As Amended) empowers the National Assembly to conduct investigations into the activities of any authority executing or administering laws made by the National Assembly.
“Also notes that Section 32 of the Petroleum Industry Act, 2021 saddles the Petroleum Midstream and Downstream Regulatory Authority with the task of regulating and monitoring technical and commercial midstream and downstream petroleum operations in Nigeria;
“Informed that as of 2002, the NNPC’s purchase of crude oil at international market prices stood at 445,000 barrels per day in order to enable it to provide petroleum products for local consumption;
“Concerned that as of 2002, the installed capacity of Nigeria’s local refineries stood at 445,000 barrels per day, however, their capacity utilisation began to nosedive and eventually fell completely to zero due to the ineffectiveness and alleged corruption of critical stakeholders in the value chain;
“Aware that due to the decline in the production capacity of the refineries, NNPC Limited found it more convenient to export domestic crude in exchange for petroleum products on trade by barter basis described as Direct Sales Direct Purchase (DSDP) arrangement;
“Also aware that component costs in the petroleum products subsidy value chain claimed by the NNPC Limited is highly over-bloated while the transfer pump price per litre used by the NNPC Limited in relation to PPMC is underquoted as N123-N128 instead of N162-N165 and this fraudulent under-reporting of N37-N39 per litre translates into over 70 billion naira a month or 840 billion naira a year;
“Worried that the consumption rate of Petroleum Motor Spirit(PMS) is 40m to 45m litres per day, however, the NNPC Ltd uses 65m to 100m litres per day to determine subsidy as discoverable from NNPC’s monthly reports to the Federal Allocation Committee (FAAC);
“Also worried that the subsidy regime has been unscrupulously used by the NNPC Ltd & other critical stakeholders to subvert the nation’s crude oil revenue to the tune of over $10B,with records showing that as at 2021, over $7B in over 120m barrels have been so diverted;
“Disturbed that there exists evidence that subsidy amounts are being duplicated, thus subsidy is charged against petroleum products sales in the books of NNPC as well as against crude oil revenue in the books of NAPIMS to the tune of over N2 trillion.”
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.
