Nigeria has spent N11 trillion on fuel subsidy in six years

Nigeria has spent N11 trillion on  fuel subsidy in the last six years, the Senate Committee on Petroleum (Downstream) said yesterday.

But the panel, which was  presenting its report at plenary, did not give details of the payment.

The report was specifically on “Promissory note programme and a bond issuance to settle inherited local debts and contractual obligations to petroleum marketers.”

Despite the disclosure, the Senate adopted the report  on the payment of N129 billion subsidy to 67  marketers.

The panel Chairman Senator Kabiru Marafa told the Senate that the approval had ended the marketers’ claim of subsidy arrears.

Some of the marketers are AA Rano, Ascon, Aiteo, Total, MRS Oil & Gas Limited, Sahara Energy, Oando Plc, A-Z Petroleum, Masters Energy, Northwest Petroleum, Fresh Energy, Forte Oil and Integrated Oil.

The Senate on Tuesday approved N69 billion subsidy for Premuim Motor Spirit (PMS) for 19  marketers.

Marafa said there were differences in the submissions of the Federal Ministry of Finance, Petroleum Products Pricing Regulatory Agency (PPPRA) and marketers.

The report pointed out that the calims of subsidy arrears were based on three inter-related elements of subsidy, foreign exchange (forex) differentials and bank interests on unpaid claims.

“That the recent request computation is based on one of the already identified elements (forex differentials).

That due to scarcity of Forex within the period, oil marketing companies were allowed to source forex outside the Central Bank of Nigeria (CBN) rate to enable them meet the country’s petroleum products demand.

“That the Nigerian National Petroleum Corporation (NNPC) Retail get their petroleum product allocation directly from the Petroleum Products Marketing Company (PPPMC) at already subsidised rate and so does not require forex to transact its business,” the report said.

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