The Senate on Monday embarked on another probe of the payment of subsidy of N10 trillion to oil marketers between 2006 till 2016.
The Senate had in the Seventh Assembly investigated the payment of subsidy to oil marketers, which led to some of the beneficiaries of the scam, popularly called fuel subsidy, facing trial.
But the Management of the Nigerian National Petroleum Corporation claimed that N5.1 trillion subsidy was paid between 2006 and 2016 and the Federal Government was indebted to it to the tune of N170.6 billion as outstanding subsidy payments.
However, the chairman, Senate Committee on Downstream, Senator Kabiru Marafa, said the information provided to the committee on the subsidy payment is scanty because the country paid N10 trillion for subsidy within 10 years.
According to Marafa: “This information is scanty.
“We need more detailed information on how these funds were paid month by month from 2006 to 2016.
“Nigeria paid N10 trillion in subsidy.
“We cannot talk about subsidy without recognizing the amount of volume that comes in.”
However, the Group Managing Director of the NNPC, Dr. Maikanti Baru, said the figure was arrived at after deduction of N4.950.80 trillion received as payments from the N5.121.40 trillion approved subsidy claims of the corporation from January 2006 to December 2015.
Giving the details of the accruals, Chief Financial Officer of the corporation, Isiaka AbdulRazaq, traced the advent of the subsidy regime to October 2003 when NNPC was directed by government to commence the purchase of domestic crude oil at international market price without a corresponding liberalization of the regulated price of petroleum products.
He explained that under the subsidy regime, NNPC and other suppliers of refined petroleum products were entitled to file subsidy claims to the Petroleum Products Pricing Regulatory Agency.
AbdulRasaq, however, noted that unlike other oil marketers, NNPC did not receive cash payment for subsidy claims as its subsidy claims were deducted out of cost payment to the Federation Account after due certification by PPPRA.
He said: “In summary, NNPC submits that the amount of over N5.1 trillion was duly approved by PPPRA as subsidy claims for NNPC.
“Out of this sum, NNPC is still being owed N170.6 billion.”
The corporation called on the Senate Downstream Committee to assist in ensuring that the outstanding debt was settled to enable NNPC effectively achieve its obligation as the supplier of last resort to the downstream sector.
Marafa commended NNPC for the elaborate presentation, while pledging its support to all stakeholders in the sector to ensure uninterrupted supply and distribution of petroleum products.
He said: “A proper report from all agencies concerned with subsidy should be sent to the secretariat.
“Nigerians need to know these monies are their monies and Federal Government spend these monies on their behalf.”
Declearing the public hearing open, the President of the Senate, Dr. Abubakar Bukola Saraki, represented by the Senate Leader, Ahmad Lawan, stated that Senate is not going to rest until the unconstitutional and illegal payment of petroleum subsidy is addressed.
Saraki added that the signing of the Petroleum Industrial Governance Bill into law would bring an end to sharp practices in the oil industry.
In his words: “This hearing today spotlights the importance of the recently passed PIGB, which after many years and several obstacles faced, has been passed by the Senate and the House of Representatives for the first time in 17 years and is ready for the assent of Mr. President.
“It is our belief that this piece of legislation, if implemented to the letter, has the potential of eliminating the present distortions in the system and sanitise the governance of the oil and gas industry of corruption and the rot in the system.
“It will introduce the market competition that would bring efficiency to the system.
“It is our hope that this will set the tone for the necessary institutional reform required to clean this all important industry of opacity and maladministration.
“This unconstitutional and illegal practice must be addressed and we are not going to rest until it is fully addressed.
“It is the duty of this committee to get to the bottom of this issue and proffer long lasting solutions to this racketeering in the fuel market.
“The mere fact that we are here again today to discuss this issue shows that those who benefit from this grand deception are not willing to let loose and government has not done what we need to do to nip this problem in the bud.”