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Tag: Subsidy

  • Subsidy removal: Nasarawa govt flags off distribution of palliative to citizens

    Subsidy removal: Nasarawa govt flags off distribution of palliative to citizens

    Nasarawa state governor, Abdullahi Sule, has flagged off the distribution of food items as palliative to the people of the state.

    The palliative was aimed at cushioning the hardship being experienced by Nigerians as a result of the removal of fuel subsidy by President Bola Tinubu.

    The state governor, Abdullahi Sule, commenced the distribution of the food items comprising rice, vegetable oil, maggi and noodles, provided by both the federal and state governments.

    The  ceremony took place on Tuesday, August 22, at the palace of the Emir of Lafia. 

    The governor said that the exercise, which would be replicated in Akwanga and Keffi on respectively, was meant to bring succour to the people especially with the hardship being experienced across the country following the removal of fuel subsidy. 

    He said the palaces have been selected for the distribution because the pallatiative is meant for all citizens of the state, irrespective of political affiliation.

    Governor Sule said: “The essence of the event has been defined clearly to everybody to understand that this is just a flag off. This is just the start. What we are trying to do here, by the grace of God, we will replicate, and it will happen in every unit of Nasarawa State.   

    “Tomorrow, we are going to have a similar flag off at the palace of our father, the Chun Mada in Akwanga.  And then, we will have another flag off that is going to take place in Keffi, at the palace of the Emir of Keffi.”

    The governor further explained that, to ensure that the food items reach the desired destination, his administration has engaged all the various religious bodies, royal fathers, members of Inter-Party Advisory Council (IPAC), community members, youths and women groups, as well as officials of government in the sharing arrangement.

    Read Also: Ondo to begin distribution of palliatives Sept 1

    He disclosed that, aside the food items, his administration has made plans to take care of civil servants in the state.

    In a remarks, the state commissioner, ministry of special duties for humanitarian services and NGOs, Margaret Elayo, called on those charged with the responsibility of sharing the palliative to discharge their responsibility with sincerity and the fear of God.

    In their welcome addresses, both the Executive Chairman of Lafia Local Government Area, Hon. Aminu Muazu Maifata and the Emir of Lafia, HRH Justice Sidi Bage Muhammad (rtd), appreciated the Governor for bringing succour to the people.

  • Subsidy removal not a curse, says Ajala

    Subsidy removal not a curse, says Ajala

    • By Tamilore Macaulay

    The Chairman of Odi-Olowo/Ojuwoye Local Council Development Area (LCDA), Rasaq Olusola Ajala, has said the removal of fuel subsidy is not a curse.

    Ajala stated that it was not to inflict suffering on the people. According to him, it was implemented to usher in an era of growth and development for the country.

    The council boss spoke during a stakeholders’ forum where he unveiled post-subsidy palliative programmes.

    The gesture is to complement the efforts of government at state and federal levels to lessen the aftermath of fuel subsidy removal on the people, he said.

    Some of the measures include quarterly interest-free loan, establishment of Odi-Olowo/Ojuwoye Traffic Maintenance and Environmental Corps (OTMEC) and introduction of monthly subsidised food items, amongst others.

    Read Also: FG pushes for discipline in money supply as FAAC shares N966.110bn July revenue

    “It is my birthday and I want to use the occasion not only to celebrate with you for being my pillars of support, but also to interact with you, discuss and talk extensively on our post-subsidy palliative programmes.

    “Our intention, therefore, is also to inform you of programmes and measures we are implementing to alleviate the hardship occasioned by the recent removal of oil subsidy by the Federal Government,” he said.

    Ajala added: “In doing this and to achieve our aim of even development and greatness, we must endure the pains but I want to assure you that the pains we are going through now will be temporary. We will start to reap bountiful rewards of this seemingly hard but necessary policy.

    “Indeed, it is a tough period, but tough period doesn’t last; only tough people do and I believe we will all smile at the end of the day. For us, the light at the end of this seemingly dark tunnel will soon shine through.”

    A member of the Lagos State House of Assembly, Nureni Akinsanya, hailed the council boss for the gesture.

    He advised people to use the loan received well and pay back, urging the government to ensure that the money got to the right people.

  • APGA hails Tinubu over subsidy removal, other policies

    APGA hails Tinubu over subsidy removal, other policies

    The national chairman of the All Progressives Grand Alliance (APGA), Sly Ezeokenwa, has expressed appreciation for several policies implemented by President Bola Tinubu, saying that subsidy removal as a significant positive step for the country.

    The party listed three major problems hampering growth in the country as politics of religion, ethnicity, and constitutional review.

    Speaking at the APGA southeast zonal office in Awka, Anambra state, Ezeokenwa said that critics of the president are overlooking his focus and understanding of the nation’s issues.

    Ezeokenwa said: “Those criticizing the president were missing the point because according to him, “Tinubu is focused and knows where the shoe pinches.

    Read Also: Subsidy removal: Economic tragedy would have tripled without Tinubu – Alawuje

    “Again, his decision to come up with palliative to cushion the effect of the subsidy removal is another knockout in some of his policies within a few months of he assumed office.

    “I believe Mr President came prepared for this job and people should exercise patience and give him some time to settle well. His government will not be like the previous one.”

    He hinted that the former governor of the state, Peter Obi, might rejoin APGA, describing him as a student of the APGA Institute of good governance, while he’s still a student of the same institute.

    He said the fame Obi had today in Nigeria started as APGA Governor, adding that plans were on the way by the party to reconcile him and other leaders like Chief Chekwad Okorie among others.

    He credited Obi’s national recognition to his time as an APGA Governor, stating that the party is working on reconciling him and other leaders like Chief Chekwad Okorie.

    Read Also: Tribunal reserves judgment in PDP, APGA cases against Ebonyi governor

    He stated: “With these, we can have true federalism which is what the country needs to move forward. However, the country is one and that’s the only way for us to be the number one in the world”

    He said what he wanted to do in APGA was to rebrand it, adding that the party would not do it alone without embracing other political parties and ethnic groups.

    “It’s going to be an alliance to solve the Nigeria problems. We have to bring every ethnic group together for alignment and realignment.

    “Another problem we have in the country is not only leadership but also followership, the last one is even worse. We want Nigeria to be driven by the young people.”

    He said the arrangement was on in expanding the party beyond Anambra and southeast, but throughout the country, adding that with such an arrangement, the party would capture more states.

  • Still on subsidy

    Finally, the Federal Government has gotten close to making its four refineries economically useful. It has entered into partnership with an Italian company to do a full turnaround maintenance of one of the country’s four refineries. But before reaching this stage, the four refineries: Old Port Harcourt Refinery with a capacity of 60,000 barrels per stream daily (bpsd); Warri Refining and Petrochemical Company with capacity for 125,000 bpsd; Kaduna Refining and Petrochemical with 110,000 bpsd capacity; and New Port Harcourt Refinery of 150,000 bpsd capacity had in the last four years cost the country N231billion for abysmal performance during the four years of Muhammadu Buhari’s first term as president.

    Too much of the nation’s resources had been lost because of dilly-dallying on the part of governments for too long. If the four refineries had been put in good working condition in a timely manner, they could have been able to refine a total of 445,000 bpd for the benefit of consumers. With this number, locally refined premium motor spirit (PMS) could have met 50% of the country’s need that has hovered between 2017 and now around 750,000 and 850,000 barrels per day. And such development could have brought oil subsidy payment down considerably, thus raising the hope of ending decades-old oil subsidy payments for importation of petroleum products to meet domestic needs in Africa’s largest petroleum producer.

    There may be no exaggeration for keen observers of Nigeria’s economy to feel, as many do, that the country must have been jinxed since the onset of post-military rule. For illustration, the first post-military government of General Olusegun Obasanjo inherited a regime of subsidy payments that had been created by years of erosion of capacity utilisation of each of the four refineries.

    Even though Obasanjo got to the point of pushing for privatisation of the refineries, this move was aborted soon after Mr Umaru Yar’Adua became president, on account of what he saw as the need to perfect the privatisation process. After Yar’ Adua’s death, President Goodluck Jonathan could not in almost six years of his presidency fix the refineries, despite the high rhetoric about the imperative of making the refineries work as they should. And even in the last four years under a government elected on the platform of change, the refineries remained partially comatose till the recent announcement that one of the refineries is ready for proper turnaround maintenance.

    The government-owned refineries have been financial liabilities to the nation for too long and it is about time the Federal Government took the right action. Although a lot of resources have been lost in the distant and immediate past, the decision of the Federal Government to begin to take the bull by the horn is welcome, because good moves are better late than never. Another positive side to the move to turn the refineries around is the information that the first maintenance will be completed within six months. This suggests that, with continued commitment on the part of the Federal Government to restore the four refineries to full capacity utilisation, a lot of the uncertainties that have bedeviled the supply of PMS may get substantially reduced within 24 months, should the government fix the refinery one after the other.

    With restoration of the four refineries to full utilisation and the likelihood that the 650,000 bpd capacity of the Dangote Refinery expected to come on stream within the next 18 months, Nigeria will be in a position to stop importing PMS and end payment of billions of naira subsidy, at least in the short-term.

    But for the long term, there is reason for the government to pause for reflection on downstream and upstream sides of the petroleum sector. Current uncertainties about profitability of the Nigerian National Petroleum Corporation (NNPC) deserve a new policy attention. And the need to determine the fate of the Petroleum Industry Bill (PIB) is a necessary condition for the executive and legislative branches of government to think things through once and for all.

    Even as the Federal Government has decided to do turnaround maintenance of the refineries, there is still the need for it to look beyond the few years of their post-maintenance life. In another 18 months, most of our refined petroleum will come from the private sector, as Dangote’s company will refine about 70% of the country’s PMS. The existence of government-owned refineries is fast becoming anomalous, especially decades after privatisation of telecommunication, electricity and other sectors of the economy. So is the distortion of the economy by decades of oil subsidy payment due for permanent solution, just as protecting the NNPC from temptations for corruption crying for a fitting reform of the downstream sector.

  • The fuel subsidy game

    IT remains a touchy issue. Should fuel subsidy be removed or not? This is the question that has been asked for ages. Yet, there has been no answer because of the divergent of opinions on the issue.   Advocates of subsidy believe that it will bring succour to the common man; provide him relief from the harsh economic climate where prices are always going up and never coming down. They believe that as long as subsidy remains, the hoi polloi will not suffer. But is that really the case today?

    We all know the answer. There is subsidy, yet commoners are suffering. They are suffering because the gains of subsidy do not get to them.  Marketers and their ilk in government are the ones reaping the benefits of subsidy. Marketers are getting paid for fuel not imported in connivance with top oil officials. The subsidy thing is a huge racket in which the masses are made to hold the short end of the stick.

    Yet, its champions want subsidy retained despite the underhand game associated with it. Those against subsidy want it removed in order to free money for development. The money wasted on subsidy, they reasoned, could be parlayed into providing social amenities. Subsidy was introduced with the best of intentions to protect the poor whose purchasing power is low. The essence is to ensure that the price of fuel is within the reach of the poor. Today, with the pump price of fuel at N145 per litre, it is certain that the poor cannot afford it. Those affected most are the small traders who need fuel to run their businesses. We are talking of the barbers, hairdressers, welders and fashion designers, who make little or nothing, but still require a lot of money to fuel their generators.

    How can they cope in an economy where business is dull because of irregular power supply? Yet, they have to deliver as customers will not hear that ‘’I could not finish your job because there was no light’’. Our stifling business environment does not help the poor who are struggling to make ends meet.  Subsidy is meant to help them but the oil cartel has hijacked everything, leaving nothing for the envisaged beneficiaries. The government tried to remove subsidy in the past and burnt its hands. It was blackmailed into restoring the regime by the sharks in the oil and gas world.

    How these people became so powerful that they can hold the government to ransom is baffling. Whenever talks centre round the removal of subsidy, they come out fiery and smoky, giving a thousand and one reasons why it should be retained.  At N145 per litre, how many litres can the poor buy to meet their needs? It is crystal clear that the subsidy regime is not being properly managed because the money is ending up in the pockets of some people, thereby defeating the purpose for its introduction.

    At the International Monetary Fund (IMF)/World Bank Spring Meetings in Washingtion, United States,  IMF Managing Director Christine Lagarde advised that subsidy be removed so that the money can be ploughed into other important sectors. Whenever Nigerians hear IMF, we cringe because of our experience with the Bretton Wood institution during the Babangida regime. At the behest of IMF, Nigeria adopted the Structural Adjustment Programme (SAP) in 1986 under which it reformed its foreign exchange/trade policies, business and agriculture regulations. But it was at a huge cost to the people, who virtually went through hell as the government rammed SAP down their throats because, as it claimed then, there was ‘’no alternative to SAP’’, and IMF supported it all the way in this warped thinking.

    IMF’s call for subsidy removal does not sit well with the people who still remember its role in the SAP debacle. There is a lot of difference between SAP and subsidy, but the huge economic crisis wrought by SAP might have brought us to where we are today and resulted in the introduction of subsidy.

    IMF saw through the subsidy fraud. This is why it urged the government to establish a social protection safety net to meet the people’s needs after subsidy is removed. The argument for subsidy removal is the same. It is hinged on the premise that the regime has no trickle-down effect. How can it when the high and mighty have cornered it? According to IMF, Nigeria should remove subsidy and use the money to build hospitals, roads and schools as well as support education and health for the people.

    The government reacted swiftly, describing the advice as ‘’good counsel”. But seeing that the advice did not go down well with the people, Finance Minister Zainab Ahmed quickly beat a retreat, saying: ‘’In principle, this is a good suggestion. But in Nigeria, we don’t have any plans to remove subsidy at this time because we have not yet designed buffers that will enable us (to) remove the subsidy and provide cushion for our people’’. Meaning, at the appropriate time, subsidy will be removed. When will that be?

    Removing subsidy is certainly not going to be easy. We saw this in the past. I do not know how the government is going to sell the removal to the people.  Marketers can fret all they want and threaten that they will not import fuel for all I care. We will suffer if they do that no doubt, but we will eventually get over it. We cannot continue to enrich a few through a bogus subsidy regime, while the people and infrastructure suffer.

    Some are likely to see IMF’s call for subsidy removal as dubious because of its perceived negative role in the economic affairs of Africa. It is either of these two things – we retain subsidy and ensure that fuel price is affordable by all or we remove it and use the money for developmental projects. Will the removal not bring the people pain, some would ask? Of course, it will. But has its retention brought them relief?

    I do not see the removal of subsidy as an IMF agenda. It is a matter which affects us as a nation and the government attempted to do the needful about it a few years ago. It removed subsidy but lacked the nerve to carry its action through. Fuel subsidy has become a free meal ticket for marketers. Whether or not they import fuel, they know how to benefit from the regime. If that is not the essence of subsidy, why then is it still being retained?

  • Subsidy: Marketers rely on banks for growth

    Marketers are likely to record positive growth if the Central Bank of Nigeria’s (CBN) directive to commercial banks on freezing interests on loans taken by them (marketers) to import petroleum products into the country is implemented, the Depot and Petroleum Products Marketers Association of Nigeria(DAPPMAN),Executive Secretary, Mr Femi Adewole, has said.

    The marketers include members of the Major Oil Marketers Association of Nigeria (MOMAN), Independent Petroleum Marketers Association of Nigeria (IPMAN) and Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN).

    In an interview with The Nation on phone, he said banks have been mandated by CBN to freeze the interests on loans given to marketers to import fuel into the country, adding that marketers would have some money for operation should the banks comply with the directive of the apex bank.

    He said marketers are in limbo following their inability to raise funds for operation, adding that the stoppage of interests on their loans is bound to bring growth.

    Adewole said: “Banks are supposed to freeze the interests on facility used for fuel importation in line with the CBN’s directive. They are supposed to net-off interests on oil subsidy loans. Every interest on debt incurred by marketers, as a result of importation of Petrol Premium Spirit (PMS), as from July 4, 2018 till date, is expected to be net-off by banks.

    “If some of the debts owed by marketers in the course of bringing fuel into the country are written off by banks, the better for marketers and the industry. That is why the issue of writing off the debts of the marketers is vital to the operation of the marketers and the industry.

    Banks, Adewole said, are not helping matter on the issue of payment of the subsidy arrears N237billion owed marketers by the Federal Government. This, he said, was evident by the ways and manners in which banks are handling the issue of payment of the subsidy arrears.

    “While some banks have acted on the promissory notes submitted to them by marketers, others are not. Often times, some banks are saying that they have not gotten ‘Policy Document’, which would enable them to start processing the promissory notes. This implies that a longer period of time would be spent by banks on the issue of processing  the promissory notes. This means marketers would not get the subsidy arrears in time,” he said.

    The issue of payment of subsidy arrears has generated a lot of controversy between the Federal Government and the marketers as both parties were divided on the actual amount of money owed as subsidies.  While this lasted, the government in conjunction with the Ministry of Petroleum Resources, Ministry of Finance, Central Bank of Nigeria (CBN), the Nigerian National Petroleum Corporation (NNPC) and the Debt Management Office (DMO) conducted investigation into fuel imports over a period of time. Subsequently, the government resolved to pay the subsidy arrears in three tranches, with the first trance paid to the marketers in form of promissory notes in December 2018.

  • Subsidy: Marketers rely on banks for growth

    Marketers are likely to record positive growth if the Central Bank of Nigeria’s (CBN) directive to commercial banks on freezing interests on loans taken by them (marketers) to import petroleum products into the country is implemented, the Depot and Petroleum Products Marketers Association of Nigeria(DAPPMAN),Executive Secretary, Mr Femi Adewole, has said.

    The marketers include members of the Major Oil Marketers Association of Nigeria (MOMAN), Independent Petroleum Marketers Association of Nigeria (IPMAN) and Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN).

    In an interview with The Nation on phone, he said banks have been mandated by CBN to freeze the interests on loans given to marketers to import fuel into the country, adding that marketers would have some money for operation should the banks comply with the directive of the apex bank.

    He said marketers are in limbo following their inability to raise funds for operation, adding that the stoppage of interests on their loans is bound to bring growth.

    Adewole said: “Banks are supposed to freeze the interests on facility used for fuel importation in line with the CBN’s directive. They are supposed to net-off interests on oil subsidy loans. Every interest on debt incurred by marketers, as a result of importation of Petrol Premium Spirit (PMS), as from July 4, 2018 till date, is expected to be net-off by banks.

    “If some of the debts owed by marketers in the course of bringing fuel into the country are written off by banks, the better for marketers and the industry. That is why the issue of writing off the debts of the marketers is vital to the operation of the marketers and the industry.

    Banks, Adewole said, are not helping matter on the issue of payment of the subsidy arrears N237billion owed marketers by the Federal Government. This, he said, was evident by the ways and manners in which banks are handling the issue of payment of the subsidy arrears.

    “While some banks have acted on the promissory notes submitted to them by marketers, others are not. Often times, some banks are saying that they have not gotten ‘Policy Document’, which would enable them to start processing the promissory notes. This implies that a longer period of time would be spent by banks on the issue of processing  the promissory notes. This means marketers would not get the subsidy arrears in time,” he said.

    The issue of payment of subsidy arrears has generated a lot of controversy between the Federal Government and the marketers as both parties were divided on the actual amount of money owed as subsidies.  While this lasted, the government in conjunction with the Ministry of Petroleum Resources, Ministry of Finance, Central Bank of Nigeria (CBN), the Nigerian National Petroleum Corporation (NNPC) and the Debt Management Office (DMO) conducted investigation into fuel imports over a period of time. Subsequently, the government resolved to pay the subsidy arrears in three tranches, with the first trance paid to the marketers in form of promissory notes in December 2018.

  • NNPC spends N623.16bn on fuel subsidy in 11 months

    Despite claims to the contrary, the Nigerian National Petroleum Corporation (NNPC) has reported to the Federation Account Allocation Committee (FAAC) that it spent N623.16 billion on under recovery otherwise known as subsidy from January to November, 2018.
    The report to FAAC was made at the last meeting in Abuja where revenue generating agencies gave account of their performances in the year.
    The NNPC in its report dated 19th December, 2018  revealed that it also has an arrears of N67.23 billion for deductions made from FAAC.
    The report said there is a total FAAC deduction of N676.49 billion comprising of N599.74 billion as under recovery for Direct Sales Direct Purchase (DSDP) arrangement and the sum of N23.43 billion as under recovered from it’s refineries.
    The document said that the amount incurred by the NNPC as under-recovery was deducted from the Federation Account as follows: January N45.78 billion, February N59.51 billion, March N34.03 billion, April N77.9 billion and May N88.9 billion.
    Breakdown of the N623.16 billion under-recovery showed that the sum of N51.24 billion was incurred in January while February, March and April recorded N58.66 billion, N36.09 billion, and N82.4 billion respectively.
    In the month of May, the amount of under-recovery incurred by NNPC on PMS dropped to N36.87 billion but rose to N53.41 billion in June, N52.43 billion in July and N63.18 billion in the month of August.
    In the month of June 2018, the corporation deducted about N68.6 billion, in July, August, September, October and November the Corporation made deductions of N52.5 billion, N60.6 billion, N71.56 billion, N51.18 billion and N65.86 billion respectively.
    Apart from the deductions from FAAC, the amount spent on subsidy or as under-recovery by the NNPC went up to N71.8 billion in September before dropping again to N51.18 billion and N65.86 billion in the months of October and November respectively.
    From the document it shows that the Nigerian National Petroleum Corporation (NNPC) is currently subsidising Premium Motor Spirit, popularly known as petrol through its under recovery arrangements.

  • Governors threaten to takeover fuel subsidy payment from NNPC

    National Economic Council (NEC), comprising the 36 State Governors in the country has threatened to take over the responsibility of subsidising petroleum products in their states based on consumption following the huge amount of money being spent by the NNPC as fuel subsidy payment annually.

    The Chairman of Governors’ Forum, Gov. Abdulazeez Yari of Zamfara who stated this while responding to questions after the meeting of NEC which was chaired by Vice-President Yemi Osinbajo at the presidential villa, Abuja on Thursday, said the governors would next month (June) take decision on whether to take responsibility for the subsidy in their states or not.

    He described as outrageous the N800billion being expended by the NNPC as subsidy, saying that NEC must decide whether to allow NNPC to continue with the payment or not.

    “Our problem is the volume, the quantity of consumption which is not acceptable.

    “Working with the governors so many decisions were taken but by next month, we are going to adopt that position either for the governors to take responsibility for the subsidy in their states based on the consumption or we look at other ways.

    “For instance, if you say we paid N800 billion subsidy, you will ask who are we paying the subsidy to? And if you look at infrastructure development and capital programme of the Federal Government, it is about N1.1 trillion, almost 70 per cent of what you are spending on developing the economy.

    “If there is no infrastructure development then you cannot talk about development of the economy. N800 billion is a huge amount that we must look at it, who is benefiting from it.

    “So we are coming up with a strategy, we are going to meet in the month of May and June. By next meeting, we will definitely come up with a position of the government at both level of volume of what is being brought into the country and what the state and Federal Government collaborate to check,’’ he said.

    The governor revealed that the Minister of State for Industry, Trade and Investment briefed the NEC on the establishment of the Nigerian Industrial Policy and Competitiveness Advisory Council which was approved by Federal Executive Council (FEC) in 2017.

    “The Industrial Council recognises that there is need for collaboration between the Federal Government (FG), State and Local Government to drive the industrialisation agenda.

    “The briefing today was to present the eight initiatives and recommendations from the Industrial Council that requires State Governments intervention,’’ he added.

    Yari said the Advisory Council requested NEC to approve the proposals to address the bottlenecks identified in order to drive the Industrialisation agenda.

    He, however, said that the Council while welcoming the prayers resolved that the Nigeria Communication Commission should go and outline its plans and communicate same to the State Governors in the next meeting.

  • N216b subsidy: Senate seeks sanction against NNPC officials

    The Senate yesterday resolved to demand sanction against officials of the Nigerian National Petroleum Corporation (NNPC) involved in illegal payment of fuel subsidy in 2017.

    The upper chamber said over N216.9 billion was frittered away by NNPC officials under the guise of payment for oil subsidy.

    It also asked the NNPC to halt forthwith illegal payments without appropriation.

    It mandated state-owned oil firm to make a formal request to the National Assembly for appropriation for the illegal payments.

    These are part of the recommendations of the Senate Public Accounts Committee in its report on the investigation into alleged illegal subsidy payments.

    The recommendations were adopted by the Senate in plenary yesterday.

    Chairman of the committee, Matthew Urhoghide, who presented the report, noted that the Federal Government spent N3.8 trillion on subsidy between 2010 and 2016.

    The Senate asked its Committee on Appropriation as well as Public Accounts to liaise with the Executive to submit the appropriation for subsidy to be included in the 2018 budget estimates.

    The Auditor General of the Federation, it said, should carry out a forensic audit of NNPC’s account over the last five years.

    Other recommendations of the committee also adopted included the need for the Federal Government to pay oil marketers the outstanding subsidy arrears owed them prior to 2017 as well as giving local refineries maximum attention to enable them function in optimal capacity.

    Senator Urhoghide said: “The NNPC declared operating losses in 2018. Why can’t we have functional refineries in Nigeria for our produce? A lot of money has gone into turn-around maintenance of old refineries. Why can’t we just build new ones?

    Senator Victor Umeh noted that “we first have to tackle the corruption in this area so that Nigerians can benefit fully from it.”

    Senators George Akume, Chukwuka Utazi and Binta Masi Garba in their separate contributions expressed concern about the recommendations of the committee.

    They noted that there was no serious sanction for those who approved payment of the subsidy without recourse to the National Assembly.

    Senator Utazi specifically said: “The 2018 budget has no provision for subsidy. We cannot live a lie here. What is the role of the Minister of Finance and who does the Ministry of Petroleum Resources report to? This has to be addressed.”

    Senator Godswill Akpabio wondered NNPC’s operational costs that they can throw away N216 billion in a year without asking for a refund? The NNPC needs to be indicted.”

    The panel chairman who gave breakdown of the N3.8 trillion subsidy payment, said while the government spent N491 billion in 2010, it paid N245 billion in 2011 and N888 billion in 2012.

    Other payments, the panel said were N1.9 trillion in 2013 and 2014, N100 billion in 2015 while 2016 gulped N150 billion.

    It said: “In 2017, NNPC imported 9.8 billion litres of Premium Motor Spirit at the cost of $5,483,634,448.91 amounting to N1,672,508,506,917.55 at the exchange rate of N305. In the previous years, all importers including the Nigerian National Petroleum Corporation had collected subsidy for differentials.”

    The panel concluded: “It is therefore curious that NNPC will in year 2017, describe the differentials as ‘operating cost’ and a loss but will not demand for refund.”

    Senate President, Abubakar Bukola Saraki said it was obvious that the NNPC had constituted the body as law onto itself.

    Saraki added that the corporation had continued to engage in monumental illegality by taking the law into their hand.

    He said the law is clear that no money should be spent without appropriation.

    Saraki said: “As some of you know I spent a lot of time on the issue of subsidy in the seventh Assembly. The recommendation on illegal payment is what is creating the problem because they are requesting for appropriation for illegal payments. The appropriation we are asking for is appropriation for 2018. The issue of illegal payment, that is a different subject matter on its own which we can decide how we are going to address.

    “The important thing is that NNPC cannot continue going forward making those payments without appropriations because definitely there is subsidy going on now and it needs to be backed by law which has always been the case since 1999. There has been appropriation for fuel subsidy.

    “It stopped briefly, but now NNPC is using the absurd word ‘Operational Costs’ to justify this expenditure — and we all know this is not operational cost, this is fuel being imported. How that becomes operational cost is even an insult on the integrity of Nigerians.

    “I think we need to bring up the issue of legality. This is because, when the IMF sees these kinds of reports, it is an embarrassment to us as a country. There are two issues here, illegal payments that have been made is one.

    “Going forward, for 2018, we should put the figure that will capture the entire subsidy for 2018 so that when they do make these payments, they are no longer illegal payments as it will be backed by an appropriation. If we agree that they should pay outstanding arrears, then Government will put that as part of the subsidy.

    “We are coming to the end of the budget exercise and that is my concern. It is better we quickly rectify this for the 2018 budget and stop the deception to Nigerians and do the right thing. By doing the subsidy also it means private companies will participate and it will even be more efficient.

    “Now, the NNPC is the only importer of PMS and Government has never been an efficient agency anyway. Who knows, if private sector are importing, the subsidy might even come down.

    “Distinguished Colleagues if we agree, let us move to the recommendations and on the issue of sanctions we can talk about additional prayers. We were hoping that today, Thursday, the Appropriations Committee will submit their report.

    “They were planning to lay it sometime next week. If we can quickly get government to come with a figure and we know that item is in budget, that stops this illegal payment going forward.”

    Additional recommendations adopted by the Senate included:1. The NNPC should stop the illegal payments without appropriation henceforth; 2. The NNPC through Mr. President, should make a formal request to the National Assembly for 2018; 3. There is need for the Federal Republic to pay all marketers their standing arrears of subsidy owed in 2017; 4. Local refineries should be given maximum attention to enable them function in full capacity; 5. The DG should carry out a full audit on the NNPC; and 6. Direct the committee to recommend appropriate sanctions for officers and personnel who have carried out this illegal payment.”

    Saraki said that “If the report from the Auditor General is not satisfactory, then we can talk about setting up an Ad-hoc Committee.

    “We also need to ensure that the Office of the Auditor General is properly funded in the 2018 budget so that they can carry about these jobs properly. Chairman Appropriations should follow up to ensure that the Government submits the budget for the fuel subsidy over the next few days so it can be submitted to us next week.