Sunday, 11 March 2018

N24bn Monthly Subsidy Payment: Reps Summon Kachikwu, Baru, Others

The House of Representatives has again queried the N24bn which the Nigerian National Petroleum Corporation claim it incurs monthly on payment of subsidy on imported Premium Motor Spirit popularly known as petrol. The lower chamber described the expenditure as an act of illegality as the funds are allegedly paid without appropriation by the National Assembly. The landing cost of a litre of PMS is said to be N171, leaving a difference of N26, but the government approved pump price is N145.

The price differential and other challenges, including allegations of smuggling by syndicates, leave a monthly subsidy bill of N24 bn. The Chairman, House Committee on Petroleum Resources ( Downstream ), Mr . Joseph Akinlaja, told Punch that a full scale investigation into the back door return of subsidy payment would start this week. Akinlaja also confirmed names of officials that had been summoned to appear before the House probe panel. He said the Minister of State, Petroleum Resources, Dr . Ibe Kachikwu; the Group Managing Director of the NNPC, Dr. Maikanti Baru; and the heads of the Pipelines and Products Marketing Company and the Petroleum Products Pricing and Regulatory Agency had been summoned to appear at the session.

Akinlaja reiterated the National Assembly's stance that subsidy was neither captured in the 2017 budget nor in the 2018 budget still awaiting passage by the legislature. He said, "What they (NNPC) is doing is illegal. We don't know where the management got the approval to make the payments. "They did not approach the National Assembly for any approval. That is why we say they have questions to answer. They need to tell Nigerians whether subsidy is back? "We have an investigation to conduct and it will start next week ( this week ) for stakeholders to come and talk about this subsidy and other renewed challenges in our oil industry, particularly the supply chain in the downstream sector”

Akinlaja recalled that the NNPC , a government corporation, had been the sole importer of products for several months after private importers boycotted importation. He said reports at the disposal of the committee suggested that the Independent Petroleum Marketers Association of Nigeria; the Depot and Petroleum Products Marketers Association; and the Major Oil Marketers Association of Nigeria were collectively owed N800 bn by the government for previous importation. He added that as a result of the mounting debts , IPMAN , DAPMAN and MOMAN stopped importing products, leaving the NNPC alone to handle the challenge.

The lawmaker added that the  surprise now was whether the NNPC was paying subsidy to itself, “ but essentially doing so without authorisation by the National Assembly" He disclosed that the position of the committee had been that the executive should forward a supplementary budget, covering the N800bn, to offset the debts so that the marketers could resume importation. Akinlaja also said that the supplementary budget had yet to come while the NNPC hadn't sought any approval from the National Assembly.

Source: Punch

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