The House of Representatives has set up an ad hoc committee to investigate the petroleum products subsidy regime from 2017 to 2021 as it alleged $7 billion (about N2.905 trillion) oil proceeds diversion.
This followed the adoption of the motion by Rep Sergius Ose Ogun, who in a motion said subsidy has been used by the NNPC Ltd and other stakeholders to subvert the nation’s crude oil revenue of over $10bn.
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He said records show that as at 2021, over $7bn in over 120 million barrels of oil had been diverted.
“Subsidy is charged against petroleum products sales in the books of NNPC Ltd as well as against crude oil revenue in the books of NAPIMS to the tune of over N2 trillion,” Ogun said.
He expressed worry that component costs in the petroleum products subsidy value chain claimed by the NNPC Ltd were “highly over-bloated while the transfer pump price per litre used by the NNPC Ltd in relation to PPMC is underquoted as N123-N128 instead of N162-N165.”
The lawmaker said this under-reporting of N37-N39 per litre translates into over N70bn a month or N840bn a year.
“The House is worried that the consumption rate of Petroleum Motor Spirit (PMS) is 40m to 45m litres per day. However, the NNPC Ltd uses 65m to 100m litres per day to determine subsidy as discoverable from NNPC’s monthly reports to the Federal Allocation Committee (FAAC).”
He informed the House that as of 2002, the NNPC’s purchase of crude oil at international market prices stood at 445,000 barrels per day to provide petroleum products for local consumption.
The Speaker of the House, Femi Gbajabiamila, while ruling on the motion, said subsidy regime has been a thing of concern.
He directed the Deputy Speaker of the House, the House Leader and the Chief Whip to come up with a crack team that would probe the subsidy regime while the committee has eight weeks to revert.
