The Nigerian National Petroleum Corporation (NNPC) and other industry participants are accused by the House of Representatives of fraudulently claiming fuel subsidy payments totaling more than $10 billion in order to obtain the country’s oil.
The Nigerian National Petroleum Corporation’s system of petroleum product subsidies between 2017 and 2021 has thus been the subject of an investigation by an ad hoc committee established by the parliament (NNPC).
This came after Sergius Ogun (PDP-Edomotion)’s was approved on the House floor on Wednesday in Abuja.
In his motion, Mr. Ogun stated that, according to information he had received, the NNPC had been buying crude oil at 445,000 barrels per day on the international market as of 2002.
Since the installed capacity of Nigeria’s local refineries was 445,000 barrels per day as of 2002, he continued, “it was to enable it to provide petroleum products for local consumption.”
However, he said that due to the inefficiency and alleged corruption of important partners in the value chain, their capacity utilisation started to plummet and eventually reached zero.
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According to the legislator, NNPC considered it more practical to export local crude in exchange for petroleum products on a trade by barter basis as a result of a drop in the production capacity of the refineries.
He claims that the NNPC’s assertion of the component cost in the petroleum product subsidy value chain is greatly exaggerated.
Mr. Ogun asserted that the NNPC’s quoted transferred pump price per liter for the PPMC was N123-N128 rather than N162-N165.
The illegal under-reporting of N37–N39 per litre, according to him, amounted to more than N70 billion per month or N840 billion annually.
Mr. Ogun raised concern over the 40 million to 45 million liters of gasoline consumed daily, noting that the NNPC consumed 65 million to 100 million liters daily.
He claims that the NNPC and other important stakeholders have distorted the country’s crude oil earnings to the tune of more than $10 billion through the implementation of the subsidy regime.
According to data, nearly $7 billion of 120 million barrels had been diverted as of 2021, according to Mr. Ogun.
The lawmaker further said that subsidy was charged to the tune of more than N2 trillion against crude oil revenue in the books of NAPIMS and against sales of petroleum products in the books of NNPC.”