The Nigerian National Petroleum Corporation (NNPC) at the moment spends N53 under-recovery in terms of petroleum products pricing for every litre of Premium Motor Spirit (PMS) consumed by Nigerians.
TheNewsGuru (TNG) reports Director of Budget in the Ministry of Budget and National Planning, Ben Akabueze made this known while fielding questions from participants at the Strategic Dialogue on the Morocco-Nigeria Relations in Abuja on Wednesday.
According to estimates available at the petroleum regulatory agency of Nigeria, the Department of Petroleum Resources, Nigerians consume 45 million litres of PMS, otherwise known as petrol, on a daily basis. This translates to mean that the NNPC records about N2.38 billion as under-recovery daily, and over N800 billion on a year basis.
According to the National Bureau of Statistics’s (NBS) PMS price watch for September 2018, average price paid by consumers for premium motor spirit (petrol) across states in Nigeria is N147.3, meaning Nigerians were supposed to be paying over N200 for fuel per litre if it were not for the ‘subsidy’, now branded as under-recovery.
According to Akabueze, at the Strategic Dialogue on the Morocco-Nigeria Relations in Abuja, the huge amount being paid by the NNPC has grave financial implications for the country by dragging down the country’s revenue.
“At the moment, in terms of pricing of petroleum products, for every litre of petrol, there is a N53 under-recovery. Well, that is the term that the NNPC, which has this responsibility, calls it and so who am I?
“On oil price, it is a double-edged sword unfortunately. This ought to be a season where we should be clicking glasses with regards to the oil price. But right now, practically every drop of refined petroleum product that we consume in the country is imported.
“And the one single factor that determines the price of refined product is the price of crude. In essence, while we export the crude at about $80 (per barrel), we effectively import back the same crude at about $100 importation price for refined products.
“That explains why despite the strong oil prices, we are not seeing a corresponding growth in government revenue,” he stated.
Akabueze further stated that building new refineries may not be the answer but getting the old ones to work and meet demands.
He said that is why the government is working to opening up private individuals/investments for refinery ownership and operations.
Tag: Fuel Subsidy
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N800bn ‘fuel subsidy’ drags down govt’ revenue
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NNPC denies holding $3.5 billion subsidy fund
The Nigerian National Petroleum Corporation (NNPC) has denied claims that it has in its custody 3.5 billion dollars Subsidy fund.
NNPC Group General Manager, Group Public Affairs Division, Mr Ndu Ughamadu, disclosed this in a statement in Abuja on Tuesday.
He explained that at the hit of the shortage of products supply at the close of last year, the National Assembly asked the NNPC to do everything possible to stem the hiccups.
Ughamadu said the corporation initiated the move to raise a revolving fund of 1.05 billion dollars, since the corporation was, and still the sole importer and supplier of white products in the country.
He noted ever since, the fund had been domiciled in the Central Bank of Nigeria, adding that at no time was it in the custody of the NNPC.
Ughamadu said the fund, called the National Fuel Support Fund, had been jointly managed by the NNPC, the Central Bank of Nigeria (CBN) andthe Federal Ministry of Finance.
Other manager include the Petroleum Products Pricing Regulatory Agency (PPPRA), Office of the Accountant General of the Federation (OGF), the Department of Petroleum Resources (DPR) and the Petroleum Equalization Fund (PEF).
He further clarified that NNPC did not independently spend a dime of the fund which he said was to ensure stability in the petroleum products supply in the country.
He added that the corporation was fully aware that it was only the National Assembly that has the statutory responsibility to appropriate on petroleum subsidy matters. -
Saraki gives reason for fallout with Goodluck Jonathan
Senate President Bukola Saraki has given reason for his fallout with former President Goodluck Jonathan in a spat that climaxed in 2015 leading to the presidential elections of that year.
In a statement personally signed by him, Saraki said the fracas between him and former President Jonathan was not unconnected to the fuel subsidy scam.
“In the history of this country, the highest fraud, the most brazen corruption has been the Fuel Subsidy scam. No one wanted to talk about it or confront entrenched powers.
“As a Senator on the platform of the ruling party at that time, I sponsored a motion on the floor of the Senate calling for investigation that led to the unprecedented exposure of the massive corruption in the fuel subsidy regime.
“That was my only point of departure with the former President,” Saraki stated.
In the statement after the judgement of the Supreme Court which upheld the earlier decision of the Code of Conduct Tribunal (CCT) discharging and acquitting him of 18 charges instituted against him, Saraki said he believes in fighting corruption and that he has made his own humble contributions to the fight against corruption.
“I believe in fighting corruption and I have made my own humble contributions to the fight against corruption in this country.
“As a presidential aide, I initiated the process that led to the enactment of the Fiscal Responsibility Act.
“I was the first governor to establish the Price Intelligence Unit which later metamorphosed into the Bureau of Public Procurement (BPP) at the federal level,” he said.
Saraki reiterated his confidence in the judicial process and the ability of the Judiciary to do justice to all manners of men and in all circumstances.
He expressed gratitude to all Nigerians who have supported him since his CCT case commenced three years ago.
“At the end of a tortuous journey of 1018 Days counting from September 22, 2015 when the case began at the Tribunal, I am happy that I have been vindicated. The Supreme Court has affirmed that there is no evidence of false declaration of assets. The court also observed that certain agents took over the responsibility of the Code of Conduct Bureau in this trial, and one can infer that this was done towards a pre-determined end.
“This outcome has gladdened my heart and further strengthened my belief in this country and as well as my faith in Almighty Allah, who is the righter of all wrongs. God has vindicated me today before the judgement of man, and I am most thankful and humbled at His grace and infinite mercies.
“Through it all, I refused to be shaken, knowing, as Dr. Martin Luther King Jr. said, that the arch of the moral universe may be long, but it bends towards justice. I knew the day would come when justice would prevail and I would be exonerated.
“I have always believed in the infallibility of our Judiciary, secure in the knowledge that our courts – the last refuge of the oppressed – would never condemn the innocent. This outcome is also a vindication of my belief in the rule of law.
“As I said in my first appearance at the CCT, this is a politically motivated case. The case was trumped up in the first instance because of my emergence as the President of the Senate against the wishes of certain forces. Ordinarily, I doubt anyone would be interested in the asset declaration form I filled over 15 years ago.
“What we have seen is the opposite. Instead of working together in the interest of the nation and to seek to do better for our people, we are fighting one another and using legal instruments to mount baseless accusations against one another. Instead of exhibiting the need for unity and working day and night for that purpose, we are stoking the fire of division and rancour. I maintain that, above all else, my CCT trial has been a flagrant vilification of my person, and shows that some people are after their personal interests rather than the national interest.
“As a result of the war of attrition, various arms of government have wasted resources needlessly. It has been three wasted years across board in this country. Three years that would have been devoted to tackling issues affecting Nigerians, including: economic recovery, insecurity, youth unemployment and strengthening national institutions – were wasted on malicious prosecution. People were ready to trade off three years that would have been devoted to fostering cooperation, unity and economic progress for their selfish ends. It is my hope that those who are behind my persecution will see the handwriting on the wall and leave me to do the work for which I was elected, so I can continue to give my all to this great country of ours.
“As many have rightly observed, it is plain to see that the anti-corruption fight is being prosecuted with vindictiveness, to target perceived political opponents. I believe in the need to fight corruption, but I will never be party to the selective application of the law or the rhetoric of an insincere anti-corruption fight.
“My antecedents speak for themselves.
“I thank Nigerians for standing by me through the difficult period of this trial. The support of ordinary Nigerians and their faith in me, as well as their sophistication and discernment in seeing this case for what it was, has been a source of strength to me.
“I am most grateful for the support of my Distinguished Colleagues and the Honourable Members of the 8th National Assembly for their unflinching support and regular attendance at the various proceedings. They were unfairly criticised for accompanying me on court appearances, but it is now clear that they did so because they believed that injustice to one, is injustice to all. They have been the true embodiment of esprit de corps. I thank them for banding together in the face of an unconscionable attack on the institution of the legislature.
“I thank my legal team for their determined and principled stance, and for their knowledge and diligence, which saw this case to its just conclusion. My gratitude to all my friends, political associates, supporters and the good people of Kwara State – all of whom have been solidly behind me.
“I thank my family for enduring this trial with their usual grace and fortitude. My immense gratitude also goes to the international community for their interest in this case. The Nigerian press have kept watch and I appreciate their vigilance in ensuring that all the facts were held up to scrutiny.
“To my supporters, yes, there is a reason to rejoice, but our celebration must be tempered with the sobering lessons of the attempted injustice from Day One of this trial. We all have to canvas for fairness in the fight against corruption. We should see this verdict as an inspiration to champion the rule of law, promote democracy and its institutions as well as tolerance of divergent views.
“The overwhelming support of so many, and the insistence on ensuring that due process and truth prevailed, has made this verdict possible,” he stated.
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Include fuel subsidy in 2018 supplementary budget, Saraki tells Buhari
Senate President, Bukola Saraki on Wednesday said the Executive must provide for fuel subsidy in the supplementary 2018 budget.
He said this in his comment after the passage of 2018 budget.
Recall that the Senate last month warned the Nigerian National Petroleum Corporation (NNPC) to halt illegal payment of subsidy without appropriation.
In a resolution, it asked the NNPC to make a formal request, through the president, for the inclusion of subsidy as an item in the 2018 budget to legalise the payment going forward.
Saraki said the inclusion of subsidy in the 2018 budget will allow for an increment in the Excess Crude Account.
“In the area that we could not address, which is the issue of fuel subsidy, I appeal to the Executive to look into this for the interest of transparency, where an expenditure close to over one trillion must be captured in the budget and when the supplementary comes, the hope is that the executive does something about it. It is an important issue and must be addressed.
“Now that the crude oil price is up to ($)80, a lot of Nigerians are expecting to see our excess crude reserve account to be on a rise but if money is being used for subsidy, it’ll be difficult to explain. That is why it is important that we capture the subsidy into the budget.”
He called for a more harmonious relationship between the Executive and Legislature to ensure speedy passage of subsequent budgets.
“A lot have been said on areas of how we have passed the budget, on areas of how we could have passed the budget earlier. I think there’s definitely room for improvement in the area of cooperation and collaboration between the Executive and the Legislative arm of government.
“At least 50 per cent of capital expenditure of ministries, some of them, up till the end of February did not do their defence. I think this is the area that we must wake up as the two arms of government.”
Saraki said the increment in the budget was done with due consultation between the two arms of government.
“Let me also comment on some of the wrong impressions regarding the issue of the increase in the aggregate expenditure. As highlighted by the chairman on appropriation, this has brought about a good working relationship between the Executive and the National Assembly. Both the Executive and the Legislature have seen areas where there’s need for intervention.
“We’ve heard the chairman of works telling us need for equitable distribution of road projects which has accounted for a significant amount. Power project intervention also. We have seen significant high percentage of capital expenditure in this 2017and I hope that that will lay a good foundation in 2018.”
Saraki urged his colleagues to do proper oversight on MDAs to ensure the budget is well implemented.
The Senate and the House of Representatives on Wednesday passed the 2018 budget, raising it by N500 billion.
Both chambers on Wednesday approved a budget that rose from N8.6 trillion to N9.1 trillion, six months after it was presented by the Executive.
President Muhammadu Buhari presented the budget to a joint session of the National Assembly on November 7, 2017.
Both houses of the National Assembly on had earlier Tuesday received the budget reports of their appropriation committees.
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Buhari-led govt concealed fraud in N24b monthly oil subsidy claim – PDP
The Federal Government is trying to cover a “huge fraud in the presidency by declaring it spends N24 billion monthly (N774 million per day) to subsidise fuel in the country,” the Peoples Democratic Party (PDP) has alleged.
The party described the figure as “fictitious and cleverly fabricated to retire the already exposed stealing of trillions of naira by the presidency cabal and All Progressives Congress (APC) interests in secret oil deals.”
PDP’s National Publicity Secretary, Kola Ologbondiyan, in a statement, yesterday, said: “It is duplicitous for the Nigerian National Petroleum Corporation (NNPC) to claim a sudden surge in fuel purchase expenses at the same time the nation faced the harshest fuel shortage across the country, with Nigerians paying exorbitantly for the product.”
According to the PDP, “The APC-led presidency is drawing its deceptive proclivity and concealment of fraud too far. And to think that such is hatched in a sector that is under the direct supervision of President Muhammadu Buhari as Minister of Petroleum Resources is most disheartening.
“This is the same presidency that claimed to have abolished fuel subsidy payments and even accused the immediate past administration of alleged corruption in its subsidy management. It is, therefore, strange that the same government can pull out unimaginable figures and claim it is the cost of subsidy enjoyed by Nigerians.”
The party further queried: “How come that with such humongous sums, Nigerians are still paying as high as N250 to N300 per litre on fuel in various parts of the country? We have since charged the Buhari-led presidency to come out clear on the administration of subsidy under its watch. The question is, why is the Federal Government cloaking the subsidy regime in secrecy, if not to conceal its duplicity?”
The PDP said: “Nigerians need to know who in the presidency approved the spending of the said N774 million per day as fuel subsidy and who the benefiting companies are. Is the subsidy captured in any appropriation instrument of the National Assembly? What is the cost of landing imported fuel to the depots and at what exchange rate? Where are the details of the subsidy payout and the negotiating options and contracts?
“In reeling out its figures, the presidency has forgotten that Nigerians are still waiting for its explanations on the leaked memo showing alleged corrupt oil contracts at the NNPC to the tune of N9 trillion ($25 billion dollars). The presidency has also refused to offer explanations on the alleged involvement of its officials in various sneaky oil subsidy deals and reported diversion of N1.1 trillion worth of crude, last year, to service APC interests.”
As if finally out with a solution to fuel importation and the attendant subsidy payments, the NNPC has said it is targeting the reduction of capital flight in procurement and cost of producing a barrel of crude oil.
Speaking in Abuja, yesterday, Group Managing Director (GMD) Maikanti Baru said the corporation is working smart to bring more money into the coffers of the federation.
“The more we bring down the cost of producing oil and gas, the more money we bring into the pockets of federal, state and local governments. We are driving the Nigerian content agenda to essentially bring down cost. We have brought down the cost of production of a barrel of oil to about $20. Our target is $15. And we will continue to march towards that,” Baru said.
The GMD, who was represented at the 2018 edition of Technology and Innovation Expo by Chief Operating Officer, Gas and Power, Saidu Mohammed, disclosed that the corporation has domesticated engineering, procurement, construction and most of the major activities in the oil and gas industry.
He said: “We have collaborated with the Nigerian Content Development Board. We have also got Nigerians who are innovative to go into fabrication. What we want to do is make sure that we domesticate the big chunk of where we spend the money, which is procurement. We have fabrications going on. We have also gone into the fabrication of vessels. What we are doing is to support all sorts of innovation.”
Commenting on the Ajaokuta-Kaduna and Kano pipeline project, the GMD said the pipelines were fully domesticated in accordance with the local content policy of the Federal Government. He added that Nigerians would do all the pre-commissioning and commissioning services.
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NNPC spends N774m daily on petrol subsidy – Baru
The Nigerian National Petroleum Corporation on Sunday announced that it currently spends N774m daily as subsidy on the 50 million litres of Premium Motor Spirit consumed across the country everyday.
Although it described the amount as “under-recovery,” the oil firm stated that the huge fund was due to the proliferation of filling stations in communities with international land and coastal borders across the country.
The Group Managing Director, NNPC, Maikanti Baru, said the multiplication of filling stations had energised unprecedented cross-border smuggling of petrol to neighbouring countries, making it difficult to sanitise the fuel supply and distribution matrix in Nigeria.
Baru disclosed this when he led a management team of the corporation on a visit to the Comptroller-General of the Nigerian Customs Service, Col. Hameed Ali (Retd), according to a statement issued on Sunday by the firm’s Group General Manager, Group Public Affairs Division, Ndu Ughamadu.
Baru revealed that detailed study conducted by NNPC indicated strong correlation between the presence of the frontier stations and the activities of fuel smuggling syndicates.
He said the activities of the smugglers led to the recent abnormal surge in the evacuation of petrol from less than 35 million litres per day to more than 60 milion litres per day, which was in sharp contrast with established national consumption pattern.