Business
Lawmaker reveals how NNPC, others used subsidy regime to divert $10bn
A federal lawmaker, Sergius Ose-Ogun, has revealed that the NNPC and some stakeholders were using the subsidy regime to divert about $10 billion belonging to the nation.
Ose-Ogun disclosed this on Wednesday during plenary after the House of Representatives revealed its plan to investigate subsidy payments, accusing the Nigerian National Petroleum Corporation (NNPC) of padding the cost of subsidy.
According to the legislature, as of 2021, over $7 billion had been diverted. It was also stated that the NNPC over-bloated the fuel consumption rate of Nigerians in its report to the Federal Allocation Committee (FAAC), reporting 65 million to 100 million litres per day, instead of 40 million to 45 million litres.
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The lower chamber intends to probe the subsidy regime between 2017 and 2021, for eight weeks, after which it will take action.
While presenting his motion to the house, Ose-Ogun said, “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”, Ose-Ogun said.
