The management of the Nigerian National Petroleum Company Limited (NNPCL) is yet to reconcile its N8.48 trillion claims for subsidy payment on Premium Motor Spirit (PMS) with the Office of the Accountant-General of the Federation (OAGF) and the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), the RMAFC Chairman, Mohammed Bello Shehu, has said.
Shehu, who disclosed this in Abuja on Thursday, said the claims by the NNPC covered the period between January 1, 2022 to date, during which the company contributed nothing to the Federation Account due to its claims of subsidy payment.
“It is saddening to note that since 1st January, 2022 to date, the Nigeria National Petroleum Company Limited (NNPCL) has not been contributing to the Federation Account due to the claimed subsidy
“The total amount withheld by the NNPCL as claimed subsidies for this period amounted to N8,480,204,553,608.13 as reported by the Office of the Accountant General of the Federation(OAGF), which is yet to be reconciled by the RMAFC, OAGF, and NNPCL”, Shehu said.
The RMAFC Chief noted that a situation where NNPC’s records of subsidy transactions were not transparent, while crude oil prices were being determined globally, it would be unwise to sustain the phantom payments of subsidy at the detriment of other critical sectors of the economy, thereby making the sustainability of such payment difficult for the government.
The Chairman described May 29, 2023 pronouncement by the new President, Bola Tinubu, on the removal of fuel subsidy due as a master stroke that broke the jinx in the country.
Describing the decision as an appropriate step in the right direction, Shehu said the country could no longer sustain fuel subsidies whose demerits far outweigh its benefits to the citizenry.
The removal of fuel subsidies, he pointed out, would eliminate the uncertainties surrounding the subsidy payment regime, just as it would free funds for the execution of critical national development and human capital enhancement projects, such as the provision of an affordable transport system, investment in the education sector, improvement in healthcare system, infrastructural development, and resuscitation of domestic refineries to eliminate dependence on imported fuel, amongst other key sectors.
Reiterating the support of the RMAFC to the decision to remove subsidy on PMS, popularly called petrol, Shehu said the decision was long overdue, as it constituted a major challenge to the economic growth and development of the country.
He said the Commission had consistently expressed its opposition to the continued payment of subsidy on petrol since the time of the late Hamman Tukur as Chairman of RMAFC under the administration of former President Olusegun Obasanjo.
The Commission’s position, he explained, was premised on the fact that the continued payment of huge amounts to a privileged few in the name of subsidy was a major drain on the nation’s scarce resources, considering that the NNPCL was one of the major sources of revenue to the Federation Account.
Consequently, he said for NNPCL to have stopped contributing revenues to the national pause due to its claim of paying fuel subsidy, largely characterized by opaqueness and other ambiguities, was unacceptable.
As one of the 14 Federal Executive Bodies established by Section 153(1)(n) and empowered by paragraph 32(a) and (c) of Part 1 of the Third Schedule of the 1999 Constitution (as amended), Shehu said the RMAFC has the constitutional mandate to join in monitoring the accruals to and disbursement of Revenue from the Federation Account and also advise Federal and State Governments on fiscal efficiency and methods by which their revenue could be increased.
The Commission’s Chairman also commended the immediate past Buhari administration for providing the enabling environment necessary for the successful take-off of the first private refinery by Aliko Dangote.
He said when the refinery would become operational, the country would witness a hassle-free petroleum products production and distribution without subsidy.
Urging the Tinubu administration to work out strategies that would cushion the attendant effect of the new policy on Nigerians, he said as a deterrent, serious measures should be taken to bring to book all the economic saboteurs that contributed to the national adversity in accordance with the extant laws of the Federation.
