Teddy Oscar, Abuja

The House of Representatives has mandatedIits Committee on Petroleum Resources (Downstream) to carry out a full scale investigative hearing on the expenditure and subsidy of kerosene (HHK, DPK) so as to establish the actual amount that has been spent on kerosene subsidy between 2010 and 2013, and report back to the House within four weeks.

The mandate, which followed a motion sponsored by Hon. Adeyinka Ajayi on the ‘urgent need to investigate the expenditure and subsidy on kerosene’, will also establish the source of the money used in financing kerosene subsidy and the relevant budgetary approval.

The Ajayi-led committee is also charged among other things to determine the companies benefitting from kerosene subsidy, establish the extent (if at all) to which the subsidised kerosene gets to the consumers at the regulated price, and investigate all incidental issues relating to kerosene supply and distribution.

It would be recalled that Hon. Bassey Ewah, chairman, Committee on Petroleum Resources (Downstream), had stated at an earlier plenary that the total sum spent on subsidising the product in the last three years amounts to N630 billion.

He observed that N110 billion was spent in 2010, N320 billion spent in 2011, while N200 billion was spent in 2012.

Although is supposedly sold to marketers at N40.90, Ajayi observed that it “hardly gets to the consumers at the regulated as it is only the Nigerian National Petroleum Corporation (NNPC) retail outlets that sell the product at N50 per litre, while other major and independent marketers retail the product at between N130 and N135 per litre.”

Ajayi recalled that Ngozi Okonjo-Iweala, minister of finance, had appeared before the Senate Committee on Appropriation, where he reportedly denied paying any subsidy on kerosene in the last two years.

“”The honourable minister allegedly stated that the annual budgetary subsidy provision does not include subsidy for kerosene, and is, therefore, not being handled by the Petroleum Products Price Regulatory Agency (PPPRA), which the agency is mandated to handle the processing of subsidy payments.

“There are conflicting claims by the honourable minister and NNPC on the source of money through which kerosene is subsidised and the amount involved therein as the office of the honourable minister was said to have been aware of nor had it authorised any such payment,” he said.

He also expressed concern on the alleged racketeering going on at the NNPC.

“Allegations are rife that kerosene is purchased from the depot by dealers at between N65 and N75 per litre, which in turn makes it commercially impossible to resell to Nigerians at the recommended retail price of N50.

“An investigation into these issues will promote transparency and accountability, and may result in a process, which will ensure that the product, which is supplied for consumption locally by NNPC, is delivered to the masses of Nigeria at the stipulated price, thereby reducing the use of non.eco friendly alternative sources of energy such as firewood, sawdust and charcoal,” he added.

abia-july.jpg