TheCable

The house of representatives has resolved to investigate “petroleum products subsidy regime” in the country.

Femi Gbajabiamila, speaker of the house, is scheduled to name members of the ad hoc committee which is expected to probe the “petroleum product subsidy regime” from 2017 to 2021 on Thursday.

The resolution was passed during plenary session on Wednesday following the adoption of a motion sponsored by Sergius Ogun from Ogun state.

Speaking on the floor of the house while moving his motion, Ogun said the subsidy regime has been “unscrupulously” used and demands legislative intervention.

“As of 2002, the NNPC’s purchase of crude oil at international market prices stood at 445,000 barrels per day in order to enable it to provide petroleum products for local consumption,” the lawmaker said.

“As of 2002, the installed capacity of Nigeria’s local refineries stood at 445,000 barrels per day, however, their capacity utilization began to nosedive and eventually fell completely to zero due to the ineffectiveness and alleged corruption of critical stakeholders in the value chain.

“Due to the decline in the production capacity of the refineries, NNPC found it more convenient to export domestic crude in exchange for petroleum products on trade by barter basis described as Direct Sales Direct Purchase (DSDP) arrangement.

“Component costs in the petroleum products subsidy value chain claimed by the NNPC is highly over-bloated while the transfer pump price per litre used by the NNPC in relation to PPMC is underquoted as N123-N128 instead of N162-N165 and this fraudulent under-reporting of N37-N39 per litre translates into over N70 billion a month or N840 billion a year.

“Consumption rate of petroleum motor spirit (PMS) is 40 million to 45 million per day, however, the NNPC uses 65 million to 100 million litres per day to determine subsidy as discoverable from NNPC’s monthly reports to the federal allocation committee (FAAC).

“Subsidy regime has been unscrupulously used by the NNPC and other critical stakeholders to subvert the nation’s crude oil revenue to the tune of over $10 billion with records showing that as of 2021, over $7 billion in over 120 million barrels have been so diverted.

“There exists evidence that subsidy amounts are being duplicated, thus subsidy is charged against petroleum products sales in the books of NNPC as well as against crude oil revenue in the books of NAPIMS to the tune of over N2 trillion.”

The motion was adopted when it was put to a voice vote by Gbajabiamila.

The ad hoc committee members to be named on Thursday has eight weeks to carry out the investigation and report back to the house.