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Senate seeks end to fuel subsidy regime



Senate seeks end to fuel subsidy regime

Senate has tasked the executive arm of government to do everything within its jurisdiction to stop fuel subsidy, and redirect the huge resources into meaningful and developmental project that would benefit majority of Nigerians.

This, the upper legislative chamber noted would help to tackle the problem of diversion of petrol to other countries by the marketers, pointing out that it was subsidy that made the illicit trade attractive to those involved.

Besides, the Group Managing Director, GMD of the Nigerian National Petroleum Corporation, NNPC, Mr. Mele Kyari, accused security agents of conniving with criminals to vandalise petroleum pipelines in the country.

These issues were discussed an interactive session between Kyari and the Joint Senate Committee on Petroleum Resources (Upstream and Downstream) on “Exiting Petroleum Subsidy: Ensuring Self-Sufficiency in Domestic Refining of Petroleum Products”.

In an address, the chairman of the joint committee, Senator Sabo Mohammed, expressed serious concerns over the way and manner fuel subsidy was managed between 2018 and 2019, saying that it arbitrarily skyrocketed.

He also berated the management of the NNPC for violating the provisions of the Constitution, by not subjecting its budgets to National Assembly scrutiny.

He said: “Permit me to say, that it is very disheartening and worrisome, the way and manner subsidy expenditures soared to over 210 per cent within two months period from average cost of N774million per day in March, 2018 to N2.4 billion per day in May, 2018.

“Report shows that NNPC as a sole importer of Petroleum products claimed N843.12 billion and over N1 trillion as under recovery in 2018 and 2019 respectively, against the average of about N511 billion per year in 10 years within the subsidy regime.

Senate seeks end to fuel subsidy regime

“This arbitrary and unsupervised direct deductions in the name of under recovery from the country’s crude oil revenue without recourse to any enabling law is totally against Section 80 (1, 2, 3, and 4) of the 1999 constitution as amended.

“Let me at this point, crave your indulgence to point out that the NNPC Act which empowers the corporation to submit to the National Council of Minister‘s not later than three months before the end of each financial year, estimates of its expenditure and income relating to the next following financial year‘ does not negate the supremacy of the Constitution on appropriation matters.

Commenting on the issue of subsidy, the NNPC GMD, noted that several attempts had been made in the past to end subsidy but to no avail.

“There are several attempts in the history of this country to walk away from subsidy in Petroleum. Until March this year, there were no subsidy on aviation fuel, but the one we couldn’t walk away from is subsidy on PMS.

He lamented the sharp fall in the price of crude, saying that it had negatively affected the country’s projected oil production per day.

“We have never seen this price collapse in the history of oil. The price fell from 50 dollars per barrel to less than 10 dollars and no country is prepared for this. Nobody saw it coming. The result of this is revenue collapse because there is a direct correlation.

“Today, in our effort to ensure price stability in collaboration with the rest of the world, our daily crude oil production is at 1.48 million barrels per day,” Kyari stressed.

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