Current Petrol Subsidy Regime Illegal, Says Senate

 • NNPC should be prepared to explain to Nigerians who approved the subsidy for them and who appropriated it

Damilola Oyedele in Abuja   

The Senate yesterday said the current payment of N26 per litre to subsidise Premium Motor Spirits (PMS) by the federal government was illegal as the monies were not appropriated for by the National Assembly as constitutionally required.

The matter of subsidy returned to the forefront of national discourse recently in the wake of the lingering fuel scarcity, following reports that the landing cost of the product per litre, had increased to N171, while the official price remains N145.

The Group Managing Director of the Nigeria National Petroleum Corporation, Maikanti Baru, said six days ago that PMS was currently being subsidised with N26 per litre, due to government’s determination to retain the pump price at N145, despite the landing cost of N171. 

He outlined the cost, insurance and freight of the product to $620 per metric tonne, and that at the exchange rate of N305 to US$1, the landing cost was N171.

Baru put consumption at about 50 million liters daily but attributed the increase to hoarding of the product. 

The Vice President Yemi Osinbajo briefing journalists in Lagos recently, said the subsidy payments were being borne by the NNPC and not the federal government. 

The statement drew the ire of several stakeholders who said Osinbajo’s statement implies that the NNPC can spend monies without appropriation, despite being an agency of  the federal government, or that the corporation is independent of the government. 

The Senate joined the controversy yesterday when it declared that the said subsidy payments were not appropriated for, and therefore illegal. 

The Chairman of the Senate Committee on Petroleum Resources ( Downstream), Senator Kabiru Marafa, speaking at a news briefing yesterday said the Senate was determined to stop the payments which are illegal.

” At our slated investigative public hearing on the sector next week Thursday, NNPC and other stakeholders should be prepared to explain to Nigerians who approved the subsidy for them and who appropriated it? 

“There is complacency in the sector and sharp practices that must be stopped. They want to take us back to subsidy regime that has never been beneficial to ordinary Nigerians across the country. We cannot go back to such scam called subsidy which robbed the country of N10 trillion between 2006 and 2016. 

” Before we went on recess , I remember submitting on the floor of the senate that I am no body’s man or rubber stamp ,the same way I strongly believe that the Senate is not a rubber stamping platform for anybody or arm of government,” he said .

Marafa maintained that there must be transparency in the sales and importation of fuel, which he claimed began in 2015 under the current administration. 

“The current administration opted for the more transparent model of directing selling crude oil and purchasing refined products, instead of the model of swapping crude for refined products adopted by the previous administration,” he noted.