* Subsidy payments used to bankroll elections, lawmaker alleges
*House committee summons PenCom DG
Juliet Akoje in Abuja
The Nigeria Extractive Industries Transparency Initiative (NEITI) yesterday disclosed that N13.7 trillion ($74.386 billion) was spent on fuel subsidy from 2005 to 2020.
This was revealed in a report submitted to the House of Representatives ad-hoc committee investigating the fuel subsidy regime from 2013 to 2022 in Abuja.
This was just as the House of Representatives’ Committee on Finance yesterday summoned the Director-General of National Pension Commission (PenCom), Dr. Aisha Dahiru-Umar, to appear in person on Monday, September 12, to answer questions on the agency’s budget performance at the hearing and sent her representatives away.
However, according to the NEITI’s documents presented by its Executive Secretary, Ogbonaya Orji, to the House Committee, the subsidy payments in 2005 was N351 billion ($2.66 billion); N219.72 billion ($1.70 billion) in 2006; N236.64 billion ($1.89 billion) in 2007; N360.18 billion ($3.03 billion) in 2008; N198.11 billion ($1.60 billion) in 2009, and N416.45 billion ($2.76 billion) in 2010.
Furthermore, in 2011, the payment was N1.9 trillion ($12.18 billion); N690 billion ($4.34 billion) in 2012; N495 billion ($3.11 billion) in 2013; N482 billion ($2.92 billion) in 2014; N316.70 billion ($1.62 billion) in 2015; N99 billion ($0.39 billion) in 2016; N141.63 billion ($0.44 million) in 2017; N722.30 billion (2.36 billion) in 2018, N578.07 billion (1.88 billion) in 2019, and 134 billion (0.37 billion) in 2020.
In May 2016, the Nigerian National Petroleum Company (NNPC) took over, making deductions from the sale of domestic crude.
Orji noted that subsidy payment expected from NNPC in 2018, was N2.294 trillion including subsidy of N722.257 billion, N138.945 billion for pipeline repairs and management cost, N28.329 billion for crude and product losses and N998.285 billion being balance that NNPC should have remitted, actual remittance stood at N897.922 billion leaving outstanding (unremitted fund) of N100.363 billion for 2018.
He added that in 2019, the sum of N2.145 trillion comprising of subsidy of N518.074 billion, N126.664 billion for pipeline repairs and management cost, N31.844 billion for crude and product losses and N1.498 trillion being balance that NNPC should have been remitted, but actual remittance stood at N821.563 billion leaving outstanding (unremitted fund) of N170.675 billion for 2019.
Also, in 2020, payment of subsidy worth N133.74 billion, N54.49 billion for pipeline repairs and management cost, N133.06 billion for crude and product losses.
The report stated that Domestic Crude Allocation for 2018, was 107.63 million barrels, out of which 13.581 million barrels (13%) was delivered to the refineries, 94.045 million barrels (87%) was exported under the DSDP arrangement and that NNPC was expected to make remittances within 90 days.
Orji in his presentation also revealed that within the transaction rules, the NNPC was expected to comply with the 90 days’ payment terms in remitting the proceeds of federation crude.
“NEITI’s report examined the pattern and consistency of remittance of sales proceeds into the designated bank account (CBN/NNPC crude oil and gas revenue naira account) by the NNPC.
“It was evident that the NNPC consistently defaulted on the sales terms of ninety (90) days. The delays ranged from 21 to 55 days. The opportunity cost of these monthly delayed remittance by NNPC was N17.5 billion.
“NNPC deducts from the sales proceeds of domestic crude oil for under-recovery (subsidy on PMS), payments for pipeline repairs and maintenance and payments for crude and product losses.
“Although amounts were appropriated for these expenditures in the approved budget for the year, however, the amounts deducted by the end of the year were over and above-appropriated sums.
“A periodic audit by the federal government to verify the utilisation of amount deducted for pipeline maintenance and repairs should be undertaken. The government should consider the following options: Allocating specific crude volume to NNPC to cater for their operational costs,” he said.
“The first question was if we think that subsidy should stay and why? All our reports are widely distributed and they are on our website, NEITI’s position, not my position over the years has been that subsidy should go. It was a recommendation.
“It’s advisory to government. We are not in the position to decide when and how it should go because you are also aware each time we make submissions that there are other contending issues that are beyond NEITI’S consideration,” he added.
Orji stressed that there are issue of security, welfare of the staff, citizens and all but NEITI’S position has been that the government should do away with subsidy. We made this first recommendation since 2006 and every other year, it’s has been on our report.
However, a member of the Committee, Hon. Serguis Ogun during his contribution alleged that subsidy was a conduit pipe to siphoning money to fund elections.
Ogun recalled that, “in 2011 there was an election and when the Supreme Court gave judgement to the then President, by January he said he’s going to remove subsidy.
“You remember that was the Ojota protest in January and there was a case in court then, when it was reported that people were just cooking documents, they didn’t supply a single product but they will just cook the documents and were making claims.
“I was part of the Committee – Swap, then some of them that the government paid billions in demurrage. All the past MDs all came in then and I don’t want to go into the answers they gave us then. So, if you look at it, 2011 going into 2012 were election years.
Meanwhile, the House of Representatives’ Committee on Finance yesterday, summoned the Director-General of PenCom, Dahiru-Umar, to appear in person on Monday, to answer questions on the agency’s budget performance at the hearing and sent her representatives away.
The Deputy Chairman of the committee, Hon. Abdullahi Saidu (APC-Niger) at the hearing in Abuja, said the PenCom boss has a record of not appearing before committees whenever there was need to answer questions saying that he was not sure the representatives can answer the committee’s questions.
Saidu said documents available to the committee showed that, PenCom remitted only one billion into government coffers out of N20.7 billion generated in 2021, saying it was not acceptable.
“I do not know where to start because your DG is always unavoidably absent, I do not know why she is shying away from sitting with the committee and I think it calls on us to demand responsibility from her,” he added.
He stressed that, “I have seen some good numbers here; N20.7 billion generated against a projection of N20.8 billion, that is almost 100 percent, but why will she shy away, she always has an excuse any time we ask her to appear.
“When you make tenable excuses, we can understand but in her case, she has become notorious in absconding, she plays truancy when it comes to appearing before the committees of the National Assembly.
“We will step them down today and call for the DG to appear on Monday,” he said.
The committee has also extended the hearing on Medium term Expenditure Framework/Fiscal Strategy Paper (MTEF/FSP) to September 15.
