Nigeria has spent over N11 trillion as payment for outstanding fuel subsidy claims in the last six years, Kabir Marafa (APC, Zamfara), chairman, Senate Committee on Petroleum Downstream, said on Thursday.
This comes as the upper legislative chamber on Thursday approved the payment of N129 billion as subsidy arrears claims to 67 petroleum marketers.
The Senate also adjourned till June 6 for its valedictory session.
The approval of the subsidy payment followed the adoption of the report of the Senate Committee on Petroleum Downstream on the Promissory Note Programme and a Bond Issuance for Oil Marketers Outstanding Claims.
Presenting his report, Marafa said this has brought closure to the issue of subsidy arrears claims by oil marketing companies.
Some of the oil marketers are AA Rano, ASCON, Aiteo, Total, MRS Oil & Gas Limited, Sahara Energy, Oando plc, A-Z Petroleum, Masters Energy, Northwest Petroleum, Fresh Energy, Forte Oil, Integrated Oil, among others.
The upper legislative chamber had on Tuesday approved the sum of N69 billion as oil subsidy claim for Premium Motor Spirit for 19 oil marketers.
Marafa on Thursday observed that there were differences in submissions made by the Federal Ministry of Finance, Petroleum Products Pricing Regulatory Agency (PPPRA) and oil marketers.
The Marafa report pointed out that all the subsidy arrears claims were based on three inter-related elements: subsidy, forex differentials and bank interests on unpaid claims.
The report seen by BusinessDay noted as follows: “That the recent request computation is based on one of the already identified elements (forex differential).
“That due to scarcity of forex within the period, Oil Marketing Companies were allowed to source forex outside CBN rate to enable them meet the country’s petroleum products demand.
“That NNPC Retail get their petroleum product allocation directly from PPPMC at already subsidised rate and so does not require forex to transact its business.”
Some of the oil marketers and the amount approved for them include Total Nigeria plc N13.7 billion, Northwest Petroleum N11.4 billion, Masters Energy N10 billion, MRS Oil plc N8.8 billion, and Sahara Energy N8.4 billion.
Others are MRS Oil & Gas Limited N6.3 billion, NIPCO plc N4.2 billion, Forte Oil N3.9 billion, DEEJONES Petroleum & Gas N4.1 billion, Emadeb N4 billion, among others.
In their separate contributions, lawmakers submitted that Nigeria was bleeding paying outstanding subsidy claims and this was hurting the nation’s economy. They, therefore, called for the building of new refineries to finally put an end to fuel subsidy payment.
Matthew Urhoghide (PDP, Edo), chairman, Senate Public Accounts Committee, expressed concern that more subsidy requests would come in the incoming Ninth Assembly because “the computations were not properly done”.
Deputy Senate President Ike Ekweremadu, who presided over the session, lamented that the Nigerian National Petroleum Corporation (NNPC) now charges subsidy claims on the Consolidated Revenue Fund of the Federation, a development he described as unconstitutional.
“I am also happy to note that we are coming to a closure on the issue of this outstanding payment on subsidy claims and then begin to think of the best way to deal with the subsidy issues. And the frightening aspect of it is that the NNPC now charges subsidy on the Consolidated Revenue Fund of the Federation. What they do is that the issue of subsidy is now in the first-line charge on our oil revenue, which is extremely dangerous because that is completely unknown to our constitution,” Ekweremadu said.
“But the implication, therefore, is that those expenditures are never appropriated. So it is a possible area of conflict between the Executive and the Parliament. I do hope that the next Assembly will be able to sit down with the Executive in order to address this issue without creating unnecessary tension. And NNPC needs to also caution itself in that respect so that it doesn’t encroach on the appropriation responsibilities of the National Assembly,” he said.
OWEDE AGBAJILEKE, Abuja
