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Senate gives NNPC 14-day ultimatum to give details of $1.05 billion subsidy account

The Senate on Thursday gave the Nigerian National Petroleum Corporation (NNPC) 14 days ultimatum within which to furnish it with details of the operation of $1.05billion fund created to augment shortfall in price of premium motor spirit (PMS) into the country.

An Ad-Hoc Committee of the Senate set up to investigate the application of $3.5 billion subsidy by NNPC headed by the Senate Leader, Senator Ahmed Lawan (APC Yobe) during a public hearing, asked the corporation to as a matter of necessity furnish the committee the details of fund lodged with the Central Bank of Nigeria (CBN).

The said $3.5 billion fuel Subsidy Fund was allegedly created by the NNPC and managed by its Group Managing Director and the Executive Director, Finance.

The committee comprising 15 senators grilled the Group Managing Director of NNPC, Dr Maikanti Baru and representative of Finance Minister, Mahmood Isa Dutse, who is the Permanent Secretary, on the veracity of existence of such fund without the knowledge of the National Assembly.

After series of questions, the committee was able to establish that the NNPC had no such subsidy account in operation but resolved to give the GMD opportunity to submit to it relevant documents concerning the operations of the $1.05billion.

Senator Lawan said though the corporation has denied knowledge of $3.5 billion subsidy account, NNPC need to make public its operation of the $1.05 billion it has with CBN to mitigate the effect of fuel importation.

He said “The committee wanted to know what has happened to the $1.05 billion in the Central Bank of Nigeria so far”.

Baru had explained that after the Corporation met with the National Assembly during the last period of fuel crisis, the corporation initiated a move and raised $1.05 billion from the dividends of its LNG accounts domiciled with the CBN.

He said there was no budgetary provision for subsidy since 2016, making it illegal for the NNPC to operate an account on subsidy but noted that the N145 per litre pump price for PMS has been far less than production cost of N185, adding that this led to series of crisis experienced in the industry, leading to the creation of the $1.05 billion window by NNPC to cushion the effect of price disparity.

Baru further said that as a shareholder in LNG investment, the NNPC has supervision with the CBN over the account and that the money was considered as part of revenue to NNPC which could be used on such an urgent occasion.

Explaining further, the NNPC boss said such fund was set aside to take care of supply gap, convert the money left from naira to dollar and tagged it National Fuel Support Fund.

The NNPC group managing director said the corporation has in stock 1.9 billion litres of PMS to last for 39 days, adding that the NNPC plans to have 45 days supply and to have sufficient supply till the end of 2019 general elections period.

The Senate ad-hoc Committee was set up on October 16, 2018 following a motion by the Senate Minority Leader, Senator Abiodun Olujinmi (PDP, Ekiti) to investigate the use of funds by the NNPC, the supply that were made to warrant the utilisation of alleged $3.5 billion, and the process involved in releasing such fund.

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Ihesiulo Grace

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