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Thursday, June 13, 2024

More Trouble For Diezani: Budget Office Denies NNPC Over N1.7trn Kerosene Subsidy



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Teddy Oscar, Abuja

The Budget Office on Wednesday denied the Nigerian National Petroleum Corporation (NNPC) when the office told the House of Representatives’ Committee on Petroleum Resources (Downstream) investigation on kerosene subsidy that the office was never aware of any approval and/or directive in writing from a higher authority mandating NNPC to import kerosene on behalf of the nation, and subsequently collect subsidy.

Testifying before the Hon. Dakuku Peterside-led committee, Dr. Bright Okogun, director general of Budget Office, also hinted that provision for subsidy is only made for fuel, but not for kerosene.

“We do not have such request (kerosene subsidy), and we do not make such payments. There are no other importers apart from the NNPC that we are aware of,” Okogun added.

Reacting to why office was silent on the directive given by late President Umaru Musa Yar’Adua, asking NNPC and the Federal Ministry of Finance to discontinue the subsidy payments on kerosene, which was viewed as consent as claimed by the NNPC officials, Okogun told the committee that there was no directive flouted by the office as there was none making the NNPC a sole importer of kerosene in the country.

“We are not aware of such a directive anywhere. The NNPC does not make budget, we do. And we did not make any budget for subsidy on kerosene within the period under review,” he submitted.

Okogun, who spoke further on the business sense in the deductions made by NNPC at source, pointed out that, if the corporation buys at $1 per litre at the international market, it has to pay for the shortfalls since the product is not sold at the same price to the final consumers within the country.

“If they buy from the international market at, let’s say at $1 per litre, and they sell less than half of a dollar, they must pay for the shortfall due to the subsidised nature of the product.
“So, it only makes a business sense, if they source money elsewhere to pay for such amount that must have been cut down from the cost, which the consumers must have borne because NNPC has been the (only) body managing the importation of kerosene in the country,” he said.

Recall that late Yar’Adua is being held responsible for the continued subsidy payments on kerosene estimated to have reached N1.7 trillion from 2010 to 2013.

NNPC alleged that the late Yar’Adua never conveyed any directive to the appropriate authorities that such payments be stopped.

Meanwhile, the Petroleum Equalisation Fund (PEF) and Nigeria Extractive Industries Transparency Initiative (NEITI) led a host of invitees to the hearing event that shunned the lawmakers.

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