Subsidy payments have gulped N11trn in 6 years – Senate

The Federal Government has spent over N11 trillion as payment for outstanding fuel subsidy claims in the last six years, the Senate has claimed.

The revelation is coming as the Red Chamber approved the payment of N129 billion as subsidy arrears claims to 67 petroleum marketers in the country .The approval followed the adoption of the report of the Senate Committee on Petroleum Downstream on the Promissory Note Programme and a Bond Issuance for Oil Marketers Outstanding Claims. Presenting his report, Senator Committee Chairman on Petroleum (Upstream), Kabiru Marafa, said payment has brought to an end the issue of subsidy arrears claims by oil marketing companies.

Some of the oil marketers are: AA Rano, Ascon, Aiteo, Total, MRS Oil & Gas Limited, Sahara Energy, Oando PLC, A-Z Petroleum, Masters Energy, Northwest Petroleum, Fresh Enery, Forte Oil, Integrated Oil among others.

The Senate had on Tuesday approved the sum of N69 billion as oil subsidy claim for Premuim Motor Spirit for 19 oil marketers. Presenting his report yesterday, Marafa observed that there were differences in submissions made by the Federal Ministry of Finance, Petroleum Products Pricing Regulatory Agency (PPPRA) and oil marketers.

The report noted that all the subsidy arrears claims were based on three inter-related elements: subsidy, forex differentials and bank interests on unpaid claims.

“That the recent request computation is based on one of the already identified elements (forex differential).

“That due to scarcity of Forex within the period, Oil Marketing Companies were allowed to source Forex outside CBN rate to enable them meet the country’s petroleum products demand.

“That NNPC Retail gets its petroleum product allocation directly from PPPMC at already subsidised rate and so does not require forex to transact its business,” the report revealed.

Some of the oil marketers and the amount approved for them include: Total Nigeria PLC N13.7 billion, Northwest Petroleum N11.4 billion, Masters Energy N10 billion, MRS Oil PLC N8.8 billion and Sahara Energy N8.4 billion.

Others are: MRS Oil & Gas Limited N6.3 billion, Nipco PLC N4.2 billion, Forte Oil N3.9 billion, DEEJONES Petroleum & Gas N4.1 billion, Emadeb N4 billion among others. In their separate contributions, lawmakers submitted that Nigeria is bleeding paying outstanding subsidy claims and that this would hurt the nation’s economy.

They therefore called for the building of new refineries to finally put an end to fuel subsidy payment. In another twist, the Chairman, Senate Public Accounts Committee, Matthew Urhoghide, expressed concern that more subsidy requests would come in the incoming Ninth Assembly because “the computations were not properly done”.

 

Source: The Sun

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