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According to Col. Hameed Ali (retired), Comptroller-General of the Nigeria Customs Service, the Nigerian National Petroleum Company Limited (previously known as the Nigerian National Petroleum Corporation) cannot justify the amount of Premium Motor Spirit (petrol) being consumed in the nation every day to support the over N6.34tn subsidy payment on the good each year.
In his presentation to the House of Representatives Committee on Finance on Thursday in Abuja during the ongoing hearing on the proposed 2023–2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, Ali claimed that the NNPC could not scientifically support the 98 million liters/day consumption it was claiming, asserting that the country’s oil company was supplying an excess of 38 million liters of PMS daily.
The committee had questioned Ali on a similar deficit in the 2023 budget that ranged from N11 trillion to N12 trillion and was outlined in the 2023-2025 MTEF/FSP.
The deficit in the 2023 fiscal year is expected to range between N11.30 trillion and N12.41 trillion, according to the federal government’s proposed budget, which has estimates totaling N19.76 trillion. When she testified before the committee earlier on Monday, Zainab Ahmed, the minister of finance, budget, and national planning, bemoaned the possibility that the government might not be able to fund treasury-funded capital projects the following year due to declining tax revenues and the annual payment of N6.34 trillion in gasoline subsidies.
The NCS chairman, however, criticized the NNPC for their subsidy claims, noting that they had been discussed last year. Unfortunately, we are discussing subsidies once more this year. More than half of the N11 trillion we will count as debt is allocated for subsidies. Petroleum product smuggling is not the problem. With NNPC, I have always argued this.
“Why would you permit the release of 98 million litres per day, if we are consuming 60 million litres of PMS per day, according to their own calculations? Why would you let that release if you already know that this will be consumed by us? You cannot claim that if I fill my tank today, I will fill the same tank with the same amount of fuel tomorrow. If I run a gas station today and I travel to the Minna depot to pick up gasoline and transport it to Kaduna, I might arrive in Kaduna in the evening and dump that gasoline. I would never have sold that gasoline so quickly to justify another load. How did you get at 60 million liters?
“The problem with smuggling is that if you release 98 million liters in reality and 60 million liters are consumed, the remaining 38 million liters should be released. How many trucks per day will transport 38 million litres? What route are they taking, and where are they transporting this to?
Saidu Abdullahi, the committee’s deputy chairman, who oversaw the session, bemoaned the diversion of subsidy funds into private wallets when they were intended for capital projects.
According to the Customs CG, the Service would reach its income projections of N2.272 trillion for 2022, N2.873 trillion for 2023, N3.540 trillion for 2024, and N3.752 trillion for 2025.
In addition to the N9.2 billion proposed in the 2023 budget, the lawmakers questioned the N6.7 billion that was spent on legal affairs out of the N7.5 billion that was approved in the 2021 Appropriations Act.
Ali clarified, however, that the NCS has written to the Presidency asking for a virement of N4 billion to cover outstanding legal costs, adding that a lack of finances might force the Service to pay up to N20 billion for a suit filed against it for default.
The lawmakers also mandated that the CG of the NCS ensure the remittance of 80% of the operating surplus to the government coffers in accordance with the Finance Act. They also stated that the Customs should propose an amendment to the current law in order to address any potential issues.
Vincent Paul
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