More details into the quagmire of oil subsidy removal scandal presently
unfolding within the Jonathan administration appears to be making its way into
the public arena. This is as the house of representative committee charged with
investigating the management of funds related to fuel subsidy began public
inquiry into the process of subsidy payments by the Federal Government of
Nigeria to select licenced marketers of petrol and kerosene.
Yesterday, the finance minister, Okonjo Iweala honored the invitation of the
[adhoc] committee. The committee quizzed her on the finance ministry’s
involvement in the oil subsidy process. In her exchanges with the committee, the
minister made it clear that all monies made from crude oil through NNPC and
partners – are not paid directly into the federal accounts of the
nation. The minister stated that the monies for the oil subsidy are withdrawn
before it gets to the national accounts – of which she accented by noting that
it was unconstitutional for the NNPC to deduct any monies from Nigeria’s crude
oil revenues before payment into the national accounts.
However the Petroleum Resources Minister’s appearance before the adhoc
committee today discounts the finance minister’s accession as untrue. The
Minister pointed blame to the finance minister for the authorization of the
N1.3trillion payment for oil subsidy. This she noted repeatedly while adding
that the N1.3trillion may have been misleading to the Nigerian public.
The Petroleum Minister admitted under questioning from Hon Lawan Farouk that the
N1.3trillion was not only paid for petrol subsidy – that the sum contained
arrears for Kerosene and Petrol subsidy dating back to 2008 – thus giving the
impression to the Nigerian public that the nation was disbursing disturbing
amounts of money for the payment of petrol subsidy. She admitted also that only
N250billion out of the N1.3trillion was paid for petrol subsidy.
The Petroleum Minister admitted that she does not know the total volume of
petrol consumed in Nigeria. This is as she complained that Nigerian Federal
Government was virtually subsidizing the entire ECOWAS community – as illegal
transporters of petrol move subsidized petrol out from Nigeria to neighboring
ECOWAS countries. But the federal petroleum minister was pinned on an
embarrassing note – as it was pointed out to her that the Petroleum Ministry
should know the total volume of petrol consume locally – that it would amount to
a rudimentary embarrassment should the ministry not have the data.
The Petroleum Minister was not able to provide the total nominal capacity of the
refineries in Nigeria. She indicated that information available to her showed
that 12% of locally consumed petrol is refined in Nigeria – that Nigeria imports
up to 90% of her petrol. She explained that Nigeria’s refining capacity has
increased to 60% from 30%.
It was learnt that operations at the Petroleum Ministry may have lost is focus
starting from 2006. As gathered, the NNPC imported 92% of all the petrol used
for local consumption in 2006 – at a much reduced cost – while private marketers
[importers] were contracted to import about 8% of petrol. Today, it has flipped,
virtually the entire locally consumed petrol is imported by independent
marketers at an exorbitant cost. The Minister states that the independent
marketers were introduced “to add competition”.
“We have done nothing unconstitutional as a ministry” – exclaimed the Petroleum
Ministry who spoke in a subdued demeanor as she managed to explain the huge
disparity in the amounts of money paid to subsidize petrol in 2006 [when it was
recorded that 27million liters of petrol was subsidized] and in 2011 [when it
was recorded that 33million liters of petrol was subsidized]. In effect,
N200billion in subsidy money was paid in 2006 for 27million liters of petrol
while N1.3trillion was paid in 2011 for 33million liters.
In 2008 when the average crude oil price per barrel was $100 about 33million
liters of petrol was subsidized at N630billion – similar to today’s market
conditions where the average price per barrel of crude oil is $100 – and about
33mllion liters of petrol was subsidized at N1.3trillion.
The Petroleum Minister battled to explain why N245billion made available in the
2011 appropriation bill for payment of fuel subsidy when N1.3trillion was
paid in November/December 2011. In her attempt, she admitted that the
N245billion in the 2011 budget was for payment of fuel subsidy for two [2]
months and not for one year. She indicated that the federal ministry of
petroleum had anticipated that the oil subsidy will be removed by March/April
2011 – during the general elections – but it was not removed – so the
ministry in tandem with the finance ministry proceeded to release additional
payment of N1.3trillion.
stay tune

This is serious. Why are they inflicting pain on Nigerians? We need to hold our leaders responsible for these manipulations. God2man.