The House of Representatives has accused the Nigerian National Petroleum Company (NNPC) and other critical stakeholders of using the subsidy regime to subvert the nation’s crude oil revenue to the tune of more than $10 billion.

The parliament stated that records showed that as at 2021, over $7 billion of 120 million barrels was diverted.

Consequently, the House has constituted an Ad-hoc Committee to investigate the Petroleum Products Subsidy regime between 2017 and 2021 by the NNPC.

This followed the adoption of a motion by Rep. Sergius Ogun (PDP-Edo), on the floor of the House on Wednesday in Abuja.

In his motion, Ogun said he was informed that as of 2002, the NNPC purchased crude oil at international market prices, which stood at 445,000 barrels per day.

He added that it was to enable it provide petroleum products for local consumption, saying he was concerned that as of 2002, the installed capacity of Nigeria’s local refineries stood at 445,000 barrels per day.

He, however, said that their capacity utilisation began to nosedive, and eventually fell completely to zero, due to the ineffectiveness and alleged corruption of critical stakeholders in the value chain.

The lawmaker said that due to decline in the production capacity of the refineries, NNPC found it more convenient to export domestic crude, in exchange for petroleum products on trade by barter basis.

According to him, the component cost in petroleum products subsidy value chain claim by the NNPC, is highly over-bloated.

Ogun claimed that the transferred pump price per litre, used by the NNPC in relation to PPMC, was under quoted as N123-N128 instead of N162-N165.

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He said that the fraudulent under-reporting of N37-N39 per litre, which translated into more than N70 billion a month, or N840 billion naira a year.

Ogun expressed worry that the consumption rate of Petroleum Motor Spirit (PMS), was 40 million to 45million litres per day, adding that the NNPC used 65 million to 100 million litres per day.

This, he said, was to determine subsidy as discoverable from NNPC monthly reports to the Federal Allocation Committee (FAAC).

According to him, the subsidy regime has been unscrupulously used by the NNPC and other critical stakeholders to subvert the nation’s crude oil revenue to the tune of more than $10 billion.

Ogun said records showed that as at 2021, over seven billion dollars of 120 million barrels was diverted.

He also alleged that there was evidence that subsidy amounts were being duplicated.

The lawmaker added that subsidy was charged against petroleum products sales in the books of NNPC, as well as against crude oil revenue in the books of NAPIMS, to the tune of more than N2 trillion.

The Star