Government wastes N667 billion yearly on petrol Nigerians don't use

President Goodluck Jonathan

The Nigerian government wasted a whopping N667 billion annually to subsidize millions of litres of petrol Nigerians never needed, with much of that amount enriching corrupt oil officials and marketers, it emerged Wednesday.

For years, the federal government was subsidizing as much as 24 million liters of petrol that Nigerians did not use daily, with much of that smuggled into other countries through a mesh of high-wired sleaze that surround the importation and subsidy of refined petrol, a top official said Wednesday.


The Executive Secretary of the Petroleum Product Pricing Regulatory Agency, Reginald Stanley, said on Wednesday that before the removal of subsidy on January 1, the country was importing up to 59 million litres of petrol daily when the country actually needs 35 million litres, with government subsidy covering all of the imports.

With the government paying N76 in subsidy, to lower the cost of fuel imported into the country, that translated to N1.9billion daily, and N667 billion annually.


Mr. Stanley spoke at the ongoing House of Representative investigations of the management of fuel subsidies, adding a new page to a harvest of shocking revelations from the hearing since Monday.


The disclosures – many of them not new having been aired at a similar sitting at the senate last year – have helped crystallize the anger and frustration of a nation that has just returned from the streets after a week of strikes and protest against the removal of fuel subsidy and the attendant raise in prices.

Addressing the lawmakers, the PPPRA boss presented fresh figures on the importation of fuels and subsidy different from those given the senators last year.


Figures of daily consumption of fuel products in the country changed and he admitted the agency had made mistakes in its computation last year, drawing the condemnations of the lawmakers.


But the most intriguing disclosure was that government subsidies cover an extra 24 million litres of petrol that are not accounted for, which lawmakers believe end up being smuggled out of the country, while some officials reap heavily at the expense of the nation.


Mr. Stanley could not explain why the nation had to import that much while the consumption is far lesser. He said however, the computations were not based on actual user data, but on the gross domestic product indicators.

The lawmakers directed the agency to forward to the committee list of importers and other details of importation of fuel from 2006 to date, vowing to unearth the details of the deal.


“Because if the subsidy you pay is for 59 million litres per day and the consumption is 35 million litres per day, then you are talking of 24 million litres which Nigerians are paying for but for which they do not consume,” said Farouk Lawan, who chairs the house ad hoc committee.


The PPPRA and the Nigeria National Petroleum Corporation have been accused of aiding the abuse of government subsidy on petrol, approving and paying false claims from importers and marketers thereby skyrocketing the cost of subsidy.

On Tuesday, the Nigeria Customs Service accused the NNPC of embarking on importation without documentation, making it difficult to ascertain actual amount of import. The corporation has also been accused of illegally deducting subsidy claims at source, at times, overpaying the claims.

The PPPRA boss denied on Wednesday the agency was involved in paying marketers.

On the other hand, the NNPC Group Managing Director, Austin Oniwon, told the lawmakers the corporation acted within the law in deducting the monies at source.

Mr. Oniwon said the Act establishing the NNPC allowed it to deduct such funds money before paying same into the federation account.


“We don’t take money from the federation account and we do not intend to take money from the federation account. I only deduct what is authorized by the Petroleum Products Pricing Regulatory Agency,” he said.



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