N649bn subsidy paid on surplus petrol in 2011 'PPPRA

The Federal Government paid N649 billion subsidy on excess imported petrol in 2011, House of Representatives ad-hoc committee investigating the subsidy regime was told yesterday in Abuja.The Executive Secretary of the Petroleum Products Pricing and Regulatory Agency (PPPRA) Reginald Stanley made the revelations on the 3rd day of the public hearing on subsidy regime at the National Assembly complex.The revelation contradicted statistics given by Petroleum Minister Diezani Alison-Madueke, who told the panel on Tuesday that the average daily consumption of petrol in Nigeria was 35 million litres.Stanley told the MPs that records available to him showed that the total daily import of petrol was 59 million litres thereby leaving a huge difference of 24 million litres. The new figures bring the annual over importation of petrol to 8.76 billion litres.When computed side-by-side with the regulated price of N65 per litre which obtained in 2011, Nigeria might have spent N649.3 billion as subsidies on excess petrol.'You told us that subsidies were paid based on 59 million litres daily consumption while the actual daily consumption is 35 million litres, leaving the gap of 24 million litres which is paid for as subsidy but not utilised by Nigerians.'This is part of the sharp practices through which ordinary Nigerians are being short-changed. This is the system that encourages smuggling and diversion by the importers because it cannot be consumed and you admitted that we don't have the storage facilities,' Committee Chairman, Rep Faruk Lawan (PDP, Kano) said.Stanley also revealed that PPPRA does not authorise payment of subsidies both to the Nigeria National Petroleum Corporation (NNPC) and major oil marketers as it only processes the invoices while 'finance ministry is responsible for payment of subsidies, we are only involved in the process of verification.'Finance Minister Ngozi Okonjo-Iweala had on Monday denied ever authorising subsidy payments, saying petroleum ministry does that.The Group Managing Director of the NNPC, Austen Oniwon, denied deducting subsidy funds at source from the Federation Account illegally, noting that the NNPC Establishment Act allows the corporation to deduct subsidy funds in the same manner with deductions on Joint Venture Cash Calls as sanctioned by the Appropriation Act.But the committee members disagreed with him arguing that, 'there is a major distinction between cash calls and subsidy.'The hearing continues today.
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