Business Hilights

Tracking Nigeria's Headline Business News Online

NNPC 101

BudgIT queries NNPC’s manner of managing N1.4tn yearly subsidy in 36 months

Ad 2
Ad 3

Leading Information Technology (IT) group, BudgIT has raised questions on why the federal government, through the Nigerian National Petroleum Corporation (NNPC) has not been able to give concise details on the amount so far spent on subsidy in 2016, 2017 and the first quarter of 2018.

In a statement issued in Lagos, the group’s Communications Lead, Abiola Afolabi, said “it is in the interest of the public that detailed information of the amount spent on fuel subsidies such as the beneficiaries, the pricing template for arriving at the subsidy rates and the volume of petroleum products utilised be made open, while subsequent ones are henceforth carried out transparently”.

Business Hilights recalls that the Minister of State for Petroleum Resources, Ibe Kachikwu, had recently disclosed that a total of N1.4 trillion is being spent annually by the Nigerian National Petroleum Corporation (NNPC) as the subsidy for Premium Motor Spirit (PMS).

He argued that “There is a growing deficit in trust due to lack of due process in the NNPC. In March 2018, the corporation announced that it spends N774 million daily, roughly N23.99 billion monthly as subsidy on 50 million litres of PMS consumed across the country”.

“The public knows very little information on the beneficiaries of the subsidy payments and control process instituted to prevent theft of these funds.

Continuing Afolabi averred that “BudgIT notes that the subsidy payments have been a contentious issue for the last 30 years. Analysts have called for its cancellation due to the lack of accountability and transparency in the administration of these funds”.

“Also, there are arguments that the subsidy regime constituted double taxation on the populace who pay the actual market price for PMS due to lack of adequate monitoring by the Department of Petroleum Resources (DPR).”

The statement quoted the Lead Partner, BudgIT, Oluseun Onigbinde, as noting that the evidence shows that amount spent on subsidising PMS is always riddled with corruption.

According to him, “We noted this in 2011, prior to the elections and we are worried that this opacity is preceding the 2019 elections again. We are worried at the use of public resources without legislative appropriation or requisite transparency,” he said.

However, the IT group observed that NNPC, in recent times, has initiated a couple of actions in trying to meet up with the global standards of transparency and accountability, including actions like publishing its monthly report on its financial and operational activities.

BudgIT was quick to add that “Notwithstanding this, the lack of information on the subsidy regime, including the amount paid and the beneficiaries are locked away from public scrutiny”.

“Therefore, BudgIT urges the Federal Government, NNPC, DPR, National Assembly, the National Economic Council (NEC) and State governments to release details on the breakdown of the amount spent on subsidy, the beneficiaries, the pricing template for arriving at the subsidy rates and the volume of petroleum products utilized,” the statement concluded.

Industry observers had queried the recent pass mark given to NNPC by OPEC on industry data management and expressed worry over the continued veiling of issues relating to subsidy payout on PMS imports.

Business Hilights is an online news channel conceptualized and structured to report and track on a daily basis; latest developments in critical business sectors to serve as a one stop news gateway for governments, foreign and indigenous investors.