• Friday, December 01, 2023
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‘Fuel importers yet to be paid from N971.138bn subsidy budget’


Reginald Stanley, executive secretary, Petroleum Products Pricing Regulatory Agency (PPPRA), on Wednesday told senators that none of the oil importers has been paid from the budgeted N971.138 billion fuel subsidy.

The Federal Government had budgeted N971.138 billion for fuel subsidy in the 2013 budget from N888.1 billion allocated in 2012.

Stanley disclosed this to the Senate Committee on Petroleum Resources (downstream) headed by Magnus Abe from Rivers State during an oversight visit to the corporate headquarters of PPPRA in the Central Area of Abuja.

Stanley, who briefed the committee members on the activities of the agency and how it had handled subsidy, however, traced the delay in the payment of subsidy to inability to sort out foreign exchange claims by the marketers at the Federal Ministry of Finance.

He told the senators, “There has been no payment for any marketer importing petroleum products in 2013. This is caused by delays in the payment of subsidy claims by the Federal Ministry of Finance resulting in interest as foreign exchange differential claims request by marketers, etc.”

Stanley explained that although the Federal Government had spent a total of N3.7 trillion in five years, the agency succeeded in reducing the number of oil marketers from 142 to 38 as at December 2012.

He also informed the senators that local consumption of PMS has been reduced from 60.25 million litres per day in 2011 to 40 million liters per day.

According to him, “Between 2006 and August 2011, total government expenditure on petroleum subsidy amounted to N3.7 trillion. Expenditure on subsidies increased from N261 billion in 2006 to N673 billion in 2010, which represents an increase of about 160 percent.

“Additionally, there have been unprecedented payments in 2011 that so far amounted to N1.4 trillion due, in part, to two key factors: increase in subsidy per litre as a result of rising global oil price, and large arrears due NNPC for household kerosene imports.

“2011 was like a gold-rush where you had briefcase marketers. Local consumption rose to 60.25 million liters per day in 2011 but had dropped to 39.66 million liters per day in 2012.

“Most of the international traders who did business with their Nigerian counterparts were also briefcase traders. They would sell and run away. That practice, I can tell you, has since been cancelled”.

Stanley told the committee that “there is lack of clarity on PPPRA and DPR roles in regulating the petroleum sector. Besides, there is lack of clarity on the subsidy status of household kerosene (HHK). We don’t know whether it has been deregulated or not.

“All over the country, between January 1 and December 30, we go round to determine the stock…that was how we first got the figure of 40 million litres per day as our local consumption”.