The federal government has paid a total of N287,351,770,696.16 as subsidy on verified claims to marketers this year with subsidy payments expected to decline from N2.2 trillion in 2011 to N971 billion this year.
This represents a reduction of over N1.2 trillion or 56 per cent.
The latest payment of N46.7 billion was made in two batches of N17,297,152,579.25 and N29,467,038,868,91 to 11 and 19 marketers respectively, bringing to a total of N287,351,770,696.16 the amount of subsidy paid this year.
The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, in a statement issued by her Special Adviser, Mr. Paul Nwabuikwu, recalled the background to the high profile issue which generated immense public concern.
“In 2011, there was a huge public outcry. As a result, this administration has worked hard to clean up the process of subsidy payments. In response the ministry set up the Aig-Imoukhuede Committee which investigated the subsidy payments. The committee was later elevated to a Presidential Committee by Mr. President.
“We also hired new auditors and we put in place different checks and balances. As a result, last year, we brought subsidy payment down to about N950 billion, and we expect that this year, we will pay about N971 billion. I believe this is a huge achievement for which the Jonathan administration deserves some credit, something that should make Nigerians proud of their government,” the statement said.
The statement added that it was in furtherance of the Jonathan administration’s commitment to transparency and accountability in the management of fuel subsidy payments, that the Federal Ministry of Finance had released the sum of N46,764,191,448.16 as latest payment to oil marketers whose claims have successfully gone through the verification process.
The claims were for May and April, 2013 batches and the marketers for April batch included AITEO Energy Resources Limited, Conoil Plc, Dee Jones Petroleum and Gas Ltd., Gulf Treasures Ltd., Forte Oil Plc, Integrated Oil and Gas Ltd., Mobil Oil Nigeria Plc, NIPCO Plc, Sahara Energy Resources Limited, and Swift Oil Line.
The beneficiaries for May were AITEO Energy Resources Limited, Avidor Oil and Gas Company Limited, Dee Jones Petroleum and Gas Ltd, Dozzy Oil and Gas Limited, Gulf Treasures Limited, Heyden Petroleum, Ibafon Oil Limited, Integrated Oil and Gas Ltd., IPMAN Investment Ltd., IPMAN Refinery and Marketing Company Ltd., Masters Energy Oil and Gas Limited, MRS Oil and Gas Company Ltd., NIPCO Plc, Northwest Petroleum and Gas Ltd., Oando Plc, Rainoil Limited, Shorelink Oil and Gas Ltd., and Techno Oil Ltd.
Meanwhile, stakeholders in the downstream sector of the petroleum industry have called on the federal government to abolish payment of subsidy on kerosene and utilise the N345 billion spent yearly on kerosene subsidy to provide small cylinders of three kilogramme and six kilogramme sizes and their accessories to enable the poor and rural dwellers to use Liquefied Petroleum Gas (LPG), popularly called cooking gas.
They also suggested that government should inaugurate a scheme to increase LPG usage in selected local government areas and make provision for small skids for LPG storage.
According to them, increased LPG usage would save the money used in the payment of kerosene subsidy for utilisation on critical infrastructure, education, health and other sectors.
Speaking on behalf of the LPG marketers, the Executive Vice-Chairman of Techno Oil Limited, Mrs Nkechi Obi, told THISDAY that the various initiatives by the Lagos State Government, Oando Plc and it subsidiary companies had apparently increased the utilisation of LPG, adding that according to a survey, the consumption of LPG in 2012, increased by 36.8 per cent, rising from 125,000 metric tonnes to 171,000 metric tonnes.
She noted that her company had unveiled its “Going Green Revolution’’ –a platform to propagate the campaign for the change.
According to her, Oando Plc has similarly invested heavily in the inauguration of its gas stove brand, and had since inaugurated its products in major retail outlets nationwide.
“The Lagos State Government inaugurated the CAGEL Programme, aimed at prompting clean and sustainable environment. The programme was inaugurated by the Governor of the state, Mr. Babatunde Fashola. The programme, which has the active support of companies like Techno Oil Limited and Oando Plc also entailed the distribution of various sizes of cylinders to participants at subsidised prices,” she said.
She further disclosed that the increase in cooking gas usage was also made possible by the commitment to steady supply of cooking gas in the domestic market by the Nigeria Liquefied Natural Gas (NLNG) Limited.
The company recently announced an increase in the quantity of LPG to the domestic market from 150,000 to 250,000 MT.
She also suggested that the federal government should utilise its agencies such as the National Orientation Agency (NOA) to promote the campaign on cooking gas utilisation.
She said Nigeria had untapped huge expanse of gas reserves in excess of 187trillion cubic feet (tcf) and an average production capacity of over three million Metric Tons (MT) but with the lowest per capita LPG consumption of 1.1kg in Africa.
“It is a disgrace that Nigeria with so much gas reserves higher than countries like Ghana and Senegal will have the lowest consumption of cooking gas,” she said.
Information from This Day was used in this report.