IF any fact has emerged so far from the eleventh-hour attempt by the House of Representatives to investigate the petrol subsidy regime, it is that more questions remain unanswered. It also signposts the obvious disarray in the management of the nation's petroleum sector. During the public hearing of the committee, Prof. Assisi Asobie, chairman of the Nigeria Extractive Industries Transparency Initiative (NEITI), explained that when in 2002 the Nigerian National Petroleum Corporation (NNPC) began to lift non-export crude oil for domestic use at international market price, it settled for exporting the allocation rather than focus on refining all of it.In effect, the only price advantage locally refined products had over imports was the non-inclusion of freight to-and-fro any designated offshore refinery. Before then, the NNPC had obtained domestic crude oil at a concessionary price which made locally refined products to sell at lower prices than their international levels. Consequently, even after domestic crude oil began to be exported, refined products here continued to go at lower than international prices because, as Asobie further explained, 'NNPC estimates the subsidy entitlements and deducts the estimated amounts directly from the domestic crude proceeds before remitting the rest to the Federation Account.'Following subsequent deregulation of the prices of diesel, aviation kerosene and other petroleum by-products, there is no doubt today that domestic crude proceeds can support total domestic demand for petrol at the previous pump price of N65 per litre and still leave surplus funds for the Federation Account. Thus, as long as the principle of dedicated domestic crude oil is upheld, and rightly so, claims by the Jonathan Administration that petrol subsidy was being funded through borrowings, or with budgeted provisions for other projects, are false. It should be stressed that petrol subsidy does not add one kobo to the ever-rising national domestic debt, which is the product of faulty fiscal and monetary policies. And so, petrol subsidy cannot be blamed for the failure of the Federal Government to effectively implement its annual budgets despite ample inflow of revenue. Now that the Nigerian people have spoken through their recent protests, there is urgent need for legislation to make inviolable the setting aside of a specific quantity of crude oil for domestic use. Such reserved crude oil should be managed for the purpose of providing cheap energy for the people. Far from being wasteful, implementing a cheap energy policy boosts economic development.The proceedings of the adhoc committee have revealed, quite disappointingly, that the long spell of direct headship of the Ministry of Petroleum Resources by Presidents led the NNPC to exploit the resulting close working relationship with the number one citizen to avoid observing due process. Henceforth, the NNPC and all importers of petroleum products should be made to complete and abide by requisite importation documents while fuel-laden mother vessels should anchor in Nigerian territorial waters. The Customs should have access to their cargo for necessary action.The degree of manipulation and the level of sharp practices over petrol subsidy, which appear to be officially engineered are altogether appalling. The Executive Secretary of the PPPRA testified before the adhoc committee that the volume of petrol imported per day in 2011 was approximately 59 million litres. The figure is questionable. Official estimates (it is high time exact figures were provided) of domestic demand have in recent times been put at 35 million litres of petrol, diesel and dual-purpose kerosene per day. The NNPC reportedly gave domestic refining capacity of 38.2 per cent in 2011. That represents daily output of 13.26 million litres of kerosene. Given the PPPRA import volume and allowing for private imports of deregulated products, total available daily fuel supply would far exceed 82 million litres. Clearly, more than 50 per cent of that total represents phantom imports on which subsidy was corruptly paid.It will be recalled that the 2011 budget provision of N245 billion for subsidy rose to N1.3 trillion without necessary appropriation. Members of the board of PPPRA include the Customs and Labour. The former testified that it was shut out of all subsidy verification processes. When the latter denied being present at any board meetings that approved the payment of subsidy, an advertorial retorted that the board of PPPRA had been dissolved. This has given room to speculation that the board of the agency may have been dissolved to make it easy to pay inflated subsidy sums to accomplices. There is lesson here: the National Assembly should pass legislation requiring boards of parastatals to be dissolved simultaneously with the submission of nominees to their successor boards. Meanwhile, all participants in the subsidy scam should be unmasked and prosecuted. Also NEITI indicated that subsidy is expected to be paid by the CBN from the Petroleum Fund on the approval of PPPRA and authorisation by the Accountant-General of the Federation. The normal procedure should prevail forthwith.The domestic crude accounts for about one-fifth of crude oil output. Its corruption-free management would guarantee cheap energy and attendant economic benefits. As in other OPEC nations, an efficient fuel subsidy arrangement can coexist with privately owned and efficiently run refineries. The Jonathan Administration should have a rethink and desist from turning petrol subsidy into alibi for its avoidable failures.
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