Our Economy Is In Danger, FG Has Spent N11Trn On Subsidy Payment In 6 Years – Senate Says

Senate, yesterday, raised the alarm that the nation has spent not less than N11 trillion on oil subsidy payment in six years, warning that further payment could kill the economy.

Consequently, the Senate asked the Federal Government to put an end to the payment of oil subsidy, which it described as a drain on the economy.

The lawmakers also called for building of new refineries to finally put an end to fuel subsidy payment in the country.

Resolutions of the Senate were sequel to the consideration of a report of the Senator Kabiru Marafa (APC, Zamfara Central)-led Committee on Petroleum, Downstream on Promissory Note Programme and a Bond Issuance to Settle Inherited Local Debts and Contractual Obligations to Petroleum Marketers.

In his presentation, yesterday, Marafa said the committee observed that there were differences in submissions made by the Federal Ministry of Finance, Petroleum Products Pricing Regulatory Agency, PPPRA, and oil marketers.

According to him, all the subsidy arrears’ claims were based on three inter-related elements, namely subsidy, forex differentials and bank interests on unpaid claims.

Okays N129bn subsidy payment to 67 oil marketers Meanwhile, the Senate, yesterday, approved the payment of N129 billion as subsidy arrear claims to 67 petroleum marketers. The approval followed the adoption of report of Senator Marafa-led Committee on Petroleum Downstream.

The Senate has, however, adjourned till June 6 for its valedictory session. Some of the oil marketers are: AA Rano, Ascon, Aiteo, Total, MRS Oil & Gas Limited, Sahara Energy, Oando PLC, A-Z Petroleum, Masters Energy, Northwest Petroleum, Fresh Enery, Forte Oil, Integrated Oil among others.

It would be recalled that the Senate had on Tuesday approved N69 billion as oil subsidy claim for Premuim Motor Spirit for 19 oil marketers.

Senator Marafa said:

“That the recent request computation is based on one of the already identified elements (forex differential).

“That due to scarcity of forex within the period, oil marketing companies were allowed to source forex outside CBN rate to enable them meet the country’s petroleum products demand.

“That NNPC Retail gets its petroleum product allocation directly from PPPMC at already subsidised rate and so does not require forex to transact its business.”

Some of the oil marketers and the amount approved for them include: Total Nigeria Plc, N13.7 billion; Northwest Petroleum, N11.4 billion; Masters Energy, N10 billion; MRS Oil Plc, N8.8 billion; and Sahara Energy, N8.4 billion.

Others are MRS Oil & Gas Limited, N6.3 billion; Nipco Plc, N4.2 billion; Forte Oil, N3.9 billion; DEEJONES Petroleum & Gas, N4.1 billion; Emadeb, N4 billion, among others.

Senators call for end to subsidy payment In his contribution, Senator Barnabas Gemade said: “What has happened to those who defrauded the nation? I believe the 9th Senate will do justice to know what has happened to this money.”

On his part,Chairman, Senate Committee on Public Accounts, Senator Matthew Urhoghide (PDP, Edo South), expressed concern that more subsidy requests would come in the incoming Ninth Assembly because

The computations were not properly done”. He said:

Government should be serious in its policies and not be directionless in executing these policies.” On his part, Senator Bassey Akpan (PDP, Akwa Ibom), said:

I submit totally to this initiative as this will add value to the petroleum sector.” Also in his contribution, Senator Victor Umeh (APGA, Anambra), said:

“It is very sad for the country that the crude that we use to drive our cars is not manufactured in Nigeria and the cash spent on this is outrageous.

In his remarks, Deputy Senate President, Senator Ike Ekweremadu, who presided, lamented that Nigerian National Petroleum Corporation, NNPC, now charges subsidy claims on the Consolidated Revenue Fund of the Federation, a development he described as unconstitutional.

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