The President Muhammadu Buhari Federal Government has been accused of committing fraud, with the issue of petrol subsidy in the country,
The Nigeria Governors Forum, NGF, and Nigeria Labour Congress, NLC, on Wednesday, specifically took a swipe at the Nigerian National Petroleum Corporation, NNPC, over what they described as the mismanagement of the fuel subsidy regime.
The NGF and the NLC, according to a statement by the Forum’s Head, Media and Public Affairs, Abdulrazaque Bello-Barkindo, said this as part of the resolutions of their meeting, in Abuja. They particularly doubted the NNPC’s fuel consumption figure.
As Labour Leaders and State Governors berated the NNPC, the Federal Government disclosed that the Corporation had submitted a N3 trillion budget to finance fuel subsidy in 2022.
Recall, that the Federal Government had on Tuesday, suspended its plan to remove fuel subsidy in June. It also shifted the implementation of the Petroleum Industry Act, PIA, by 18 months.
Reviewing the recent developments in the Oil industry, the NGF and Labour Leaders agreed that the gap in the subsidy removal agenda was “hidden in the untruth, bandied by the administrators of the subsidy”.
They noted that the NNPC is the forefront of the mismanagement of the proceeds accrued therein.
Bello-Barkindo, in his statement, disclosed that the Chairman of the NGF, Governor Kayode Fayemi of Ekiti State, argued that the nation’s economy is at the precipice, and that it has become necessary for the two groups to verify NNPC’s estimates carefully.
His words: “Fayemi told the Labour leaders that subsidy removal had remained an ongoing conversation not just among Governors, but the country at large, and emphasised that Governors could not but be part of the solution providers in this onerous task that is confronting the nation.
“There are raging questions of accountability associated with subsidy removal in the country, and observed that the NGF and the NLC can jointly work together to proffer solutions that heal the economy and provide succour to the Nigerian people.
“We need a partnership with the NLC to confront the challenges of what the NNPC is about… because there is a lot of fraud in the consumption and distribution figures that the country is getting and we can only move forward if the NLC engages all those who are knowledgeable in the field like PENGASSAN (Petroleum and Natural Gas Senior Staff Association of Nigeria) to conduct a thorough research into the sector before any further action is taken on subsidy.”
Speaking further, Governor Fayemi stated that only about 8 States benefit directly from the subsidy, while all the others have to contend with the issues by themselves.
Also speaking, the Edo State Governor, Godwin Obaseki, who joined the meeting virtually, warned that Nigeria could either continue acting like Santa Claus, or take concrete actions, rather than wasting away N3 trillion on petrol subsidy. He added that the country would do well, if it revamps the Power sector, virtually comatose.
Earlier, the Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed on Wednesday, to State House Correspondents, after the week’s virtual Federal Executive Council, FEC, meeting, at the Presidential Villa, Abuja, that the NNPC has submitted a N3 trillion budget for subsidy for 2022.
According to Ahmed, only N443 billion is currently available in the 2022 budget, meant to cater for petrol subsidy, from January to June, but considering the prevailing economic realities, the Council proposed a year-long provision for the subsidy.
She said that the Council considered the proposal, and directed her Ministry to approach the National Assembly for an amendment to the fiscal framework and the budget.
Her words: “We also presented to Council today, a request for Council’s consideration to make additional funding provisions to enable us to meet incremental fuel subsidy request in the 2022 budget. You will recall that in the 2022 budget, as appropriated, we have made a provision of N443 billion for a subsidy for January to June.
“Having taken into account the current realities; increased hardship in the population, heightened inflation, and also that the measures that needed to be taken to enable a smoother exit from the fuel subsidy are not yet in place, council agreed that it is desirable to exit fuel subsidy.
“The Nigerian National Petroleum Company has presented to the Ministry, a request for N3 trillion as fuel subsidy for 2022. What this means is that we have to make an incremental provision of N2.557 trillion, to be able to meet the subsidy requirement, which is averaging about N270 billion per month.”
She said that in 2021, the actual under-recovery that had been charged to the Federation was N1.2 trillion, which meant an average of N100 billion, but in 2022, because of the increased crude oil price per barrel in the global market, now at $80 per barrel, and also because NNPC’s assessment was that the country was consuming 65.7 million litres per day. The incremental cost would therefore, be N3 trillion in 2022.
Responding to questions around how the planned N3 trillion subsidy budget would be funded, the Minister stated: “We will have to reduce it (the cost of subsidy) from that N3 trillion, and that is one. Secondly, also we have been running reconciliations with the NNPC to minimise the cost, but also we have several reconciliations with the NNPC, and NNPC itself owed, in some cases, government.
“So, we want to be able to settle some of the subsidy costs through this reconciliation process.”
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