Senate frowns at N11tr oil subsidy expenditure in 6 yrs

…Approves N129.4b subsidy to 67 marketers

Tunde Opalana, Abuja

The Senate on Thursday expressed displeasure that the Federal Government in the last six years paid a whooping N11 trillion to oil marketers as subsidy for imported petroleum products.

This development, the Senate said, is not healthy for the nation’s ailing economy as they berated the Buhari administration for paying subsidy to oil marketers over the years without Senate’s approval.

The Senate also approved the payment of an additional N129.4 billion subsidy claims to 67 petroleum marketers.

This followed the consideration of the report of the Committee on Downstream Petroleum Sector on the promissory note programme and a bond issuance to settle inherited local debts and contractual obligations to petroleum marketers.

Chairman of the committee, Sen. Marafa, in the report, said 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 their 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; and Emadeb – N4 billion among others.

In his contribution, Senator Barnabas Gemade, who opposed the subsidy payment, wondered why the Federal Government and the anti -graft agencies had failed to convict any of the oil marketers who were indicted in the illegal subsidy claims.

He noted with regret that the government had not done enough in bringing the owners of the affected 50 oil firms to justice many years after their prosecution.

He said: “What has happened to those who defrauded the nation? I believe that the 9th Senate will do justice to know what has happened to this money.”

He added: “The government should stand by its words. If the government fails to end the subsidy regime, it will kill the Nigerian economy and all of will be accused to it.”

Senator Yusuf Yusuf (Taraba Central) said until the value of the naira is addressed, there would always be fuel subsidy issues.

“Until we tackle the value of the naira, we will be having subsidy,” Yusuf said.

Senator Bassey Akpan (Akwa Ibom North East) submitted totally to this initiative, saying it will add value to the Petroleum sector”.

Senator Victor Umeh (Anambra Central) said: “It is very sad for the country that the crude that we use to drive our cars are not manufactured in Nigeria and the cash spent on this is outrageous.

“If we continue to hope that one day this subsidy will end, we are deceiving ourselves. What would Nigerians face after this payment of arrears?

“People in government have refused to face the problem. Everyone is depending on oil revenue and yet no functional refineries have been set in place.

“The government should be able to plan to build 5 refineries, why can’t we use the money we get from sale of our crude to build refineries? The government should give us a programme to enable us have 4 functional refineries in 5 years.

Exchange rates are not the problem, but our inability to do what others are doing is the main issue.”

Senator Mathew Urhogide (Edo South) said: “Government should be serious in their policies and not be directionless in executing these policies.”

Deputy Senate President, Ike Ekweremadu, who presided at plenary said: “Let me thank Sen. Marafa and his colleagues for the painstaking work they have done in respect of this report.

“Distinguished Colleagues, I want us to note that we are coming to a closure on this as parliamentarians, I hope we can close the books in respect of that and think of the best way to deal with the subsidy issues.

The factory aspect of it is what Senator Yusuf told us; the issue of subsidy is now a first line charge on oil drilling which is extremely dangerous.

“I hope that the next Assembly will be able to sit with the Executive to address this issue and resolve it without creating unnecessary tension. The NNPC needs to also caution themselves so that they do not encroach on the appropriation responsibility of the National Assembly.

“Having said this, I would like to thank all of us for looking into this report and trying to find lasting solutions.

I hope that those who are owing are able to pay back the banks and get back to their businesses while we find lasting solutions to the issue of subsidy.

We need to do something about provisions of refineries in our country – it is not rocket science. Even if it does not resolve the issue of subsidy, we would have gone a long way in addressing it.”