Reps summon Kachikwu, Baru, PPPRA boss over fuel subsidy payments

*Says subsidy payments illegal, unconstitutional

The House of Representatives on Wednesday, summoned the Minister of State for Petroleum Resources, Ibe Kachikwu, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Kanti Baru and the Executive Secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA), Abdulkadir Saidu Umar, to appear before it’s Committee on Finance and Petroleum Downstream to explain the current subsidy payment by the federal government.

The House passed the resolution following worries over the lingering fuel shortage across the country, as well as reports attributed to the NNPC announcing the implementation of the subsidy regime by the Buhari administration.

Also in passing the resolution, the House called on the Federal Government to make provision for subsidy payment in the 2018 Appropriation Bill, if it plans to continue with subsidy payments.

The House resolution followed the adoption of the motion of urgent national importance sponsored by Rep. Karimi Sunday, on the need to investigate the fuel subsidy payments by the NNPC.

Sunday in his lead debate, said that the current landing cost of petrol is N171 per litre despite the fact that the Federal Government has pegged the official rate at N145 per litre, adding that the NNPC is at the moment paying the N26 per litre difference despite government’s position that it has removed petroleum subsidy.

This implementation of the subsidy regime, he added, has no parliamentary appropriation in the 2017 Appropriation Act.

He also stated that the NNPC had in January 2017, conceded that fuel subsidy had returned, adding that the corporation between January and March of the same year recorded an under recovery of N46.86 billion, while as at December over N300bn had been expended on subsidy alone in 2017.

According to him, the under recovery in the downstream petroleum market implies that the expected open market price for petrol is below the approved retail price as such, the NNPC’ has been absorbing the extra cost and paying subsidy to importers of petrol.

“The under recovery is caused by increase in the price of crude in the international market from about $20 per barrel in 2015 to $50 p/b in 2017 and $70 p/b currently.

“The increase in price of crude oil, low rate of the Naira and difficulties in assessing foreign exchange have caused marketers to discontinue petrol importation,” he added.

The lawmaker expressed concern that the subsidy payment by the NNPC contravenes Section 80(4) of the constitution, “as the subsidy regime is being done without appropriation or approval by the National Assembly and as such is illegal and unconstitutional.”

While pointing out that the 2018 Appropriation Bill does not include provision for petroleum subsidy, Rep. Sunday stated that “such non-appropriated expenditure on subsidy is illegal and susceptible to corruption, embezzlement and mismanagement if not subjected to approval and scrutiny by the parliament.”

In adopting the motion, the House also decided that PPPRA chief will account for the monies spent on subsidy payment by the present administration since January 2017 till date as well as disclosing the current petroleum pricing regime.

Henry Omunu, Abuja