The House of Representatives has constituted an ad hoc committee to investigate the Petroleum Products Subsidy regime between 2017 and 2021 by the Nigerian National Petroleum Company (NNPC).

This followed the adoption of a motion by Sen. Sergius Ogun (PDP-Edo) at the plenary on Wednesday.

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.

The lawmaker, however, said 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.

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

He noted that the component cost in petroleum products subsidy value chain claim by the NNPC was 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.

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

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The lawmaker further expressed concern that the consumption rate of Petroleum Motor Spirit (PMS), otherwise known as petrol, was 40 million to 45 million 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 dollars.

Ogun said records showed that as of 2021, over seven billion dollars of 120 million barrels were 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