The Nigerian National Petroleum Corporation (NNPC) on Monday injected a fresh twist to the fuel subsidy controversy with a claim that the Federation Account was indebted to the corporation about N170.6 billion in unpaid arrears.
The Chief Financial Officer of the corporation, Isiaka AbdulRazaq, told the Senate Committee investigating fuel subsidy payments that the amount covered the period between January 2006 and December, 2015.
The Group Managing Director of the Corporation, Maikanti Baru, triggered the controversy in the wake of the fuel scarcity that resurfaced in the country late last year.
Mr. Baru had said the NNPC was again paying subsidy on the supply and distribution of petroleum products, despite a federal government decision in 2015 to remove the payment from the fuel pricing template by the Petroleum Products Pricing Regulatory Agency, PPPRA,
He said with landing cost of imported petrol at N171.40 per litre and the retail price fixed at N145 per litre, the NNPC was bearing as extra cost a minimum of N26.40 for every litre of petrol supplied.
However, the NNPC refused to accept the N26.40 difference as subsidy. Rather it preferred to count it as part of its operational costs deductible from the revenue transferable to the Federation Account.
On Monday, Mr. Baru led the NNPC management before the ongoing investigative hearing to explain the components of the alleged N5 trillion subsidy payments from 2006 to 2016.
In his presentation, the GMD said the figure was arrived at after deduction of N4.95 trillion received as payments from the N5.12 trillion approved as subsidy claims for the corporation from January 2006 to December 2015.
Mr. AbdulRazaq traced the subsidy regime to October, 2003 when NNPC was directed by government to commence the purchase of domestic crude oil at international market price without a corresponding liberalisation of the regulated price of petroleum products.
Mr. AbdulRazaq explained that under the subsidy regime, NNPC and other suppliers of refined petroleum products were entitled to file claims for subsidy to the PPPRA.
Unlike other oil marketers, he said NNPC had not been receiving cash payments for subsidy claims since its claims were deducted as operational cost payment to the Federation Account after due certification by PPPRA.
”In summary, NNPC submits that the amount of over N5.1 trillion was duly approved by PPPRA as subsidy claims for NNPC. Out of this sum, NNPC is still being owed N170.6 Billion,’’ the NNPC CFO said.
The NNPC asked the Senate Downstream Committee to assist in ensuring that the outstanding debt was settled to enable it effectively achieve its mandate as “the supplier of last resort to the downstream sector.”
The chairman of the committee, Kabiru Marafa, said the National Assembly will continue to support all players in the oil industry to ensure uninterrupted supply and distribution of petroleum products.