Nigeria has spent over N11 trillion as payment for outstanding fuel subsidy claims in the last six years, Chairman, Senate Committee on Petroleum Downstream, Kabir Marafa (APC, Zamfara) has disclosed.
This comes as the upper legislative chamber on Thursday approved the payment of N129 billion as subsidy arrears claims to 67 petroleum marketers.
The approval 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.
This is even as the Senate has adjourned till June 6 for its valedictory session.
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 Enery, Forte Oil, Integrated Oil among others.
It would be recalled the upper legislative chamber had on Tuesday approved the sum of N69 billion as oil subsidy claim for Premuim Motor Spirit for 19 oil marketers.
Presenting his report on Thursday, Marafa observed that there were differences in submissions made by the Federal Ministry of Finance, Petroleum Products Pricing Regulatory Agency (PPPRA) and oil marketers.
The 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.
“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 subsidized rate and so does not require forex to transact its business,” the report seen by BusinessDay read.
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 is bleeding paying outstanding subsidy claims and that this would hurt the nation’s economy.
They therefore called for the building of new refineries to finally put an end to fuel subsidy payment.
However, the Chairman, Senate Public Accounts Committee, Matthew Urhoghide (PDP, Edo) 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 charge subsidy claims on the Consolidated Revenue Fund of the Federation, a development he described as unconstitutional.
His words: “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 that the NNPC now charge 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.
“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 other to address this issue without creating unnecessary tension. And NNPC needs to also caution themselves in that respect so that they don’t encroach on the appropriation responsibilities of the National Assembly”.