15 Years, Says NEITI

By Tony Tagbo, Abuja 

The Nigeria Extractive Industries Transparency Initiative (NEITI) said the Federal Government spent N13.7 trillion ($74.386 billion) on fuel subsidies on Premium Motor Spirit, (PMS) popularly called petrol or fuel, in 15 years. 

According to the Executive Secretary of NEITI, Mr. Ogbonnaya Orji, the amount was expended by the government from 2005 to 2020. 

Orji disclosed this in a report he presented to the House of Representatives ad-hoc committee investigating fuel subsidy regime between 2013 and 2022 in Abuja at theweekend. 

According to the report, in May 2016, the Nigerian National Petroleum Company Limited (NNPCL) being the sole importer of petrol took over making deductions from the sale of domestic crude which it termed under- recovery. 

Giving a breakdown, Orji revealed in the report that the subsidy payments in 2005 were N351 billion ($2.66 billion); 2006 was N219.72 billion ($1.70 billion); 2007 was N236.64 billion ($1.89 billion); 2008 was N360.18 billion ($3.03 billion); 2009 was N198.11 billion ($1.60 billion), and 2010 was N416.45 billion ($2.76 billion). 

He added that payment for 2011 was N1.9 trillion ($12.18 billion); 2012 was N690 billion ($4.34 billion); 2013 was N495 billion ($3.11 billion); 2014 was N482 billion ($2.92 billion); 2015 was N316.70 billion ($1.62 billion); 2016 was N99 billion ($0.39 billion); 2017 was N141.63 billion ($0.44 million); 2018 was N722.30 billion (2.36 billion), 2019 was N578.07 billion (1.88 billion), and finally 2020 was 134 billion (0.37 billion).

In May 2016, the NNPCL being the sole importer of petrol, took over, making deductions from the sale of domestic crude which it termed under-recovery. 

 The report also stated that subsidy payment expected from NNPC in 2018, was N2.294 trillion including subsidy of N722.257 billion, N138.945 billion for pipeline repairs and management costs, N28.329 billion for crude and product losses and N998.285 billion being balance that NNPCL should have remitted, actual remittance stood at N897.922 billion leaving outstanding (unremitted fund) of N100.363 billion for 2018.

Orji added that in 2019, the sum of N2.145 trillion comprising of subsidy of N518.074 billion, N126.664 billion for pipeline repairs and management costs, N31.844 billion for crude and product losses and N1.498 trillion being the balance that NNPC should have been remitted, but actual remittance stood at N821.563 billion leaving outstanding (unremitted fund) of N170.675 billion for 2019; in 2020, payment of subsidy was worth N133.74 billion, N54.49 billion for pipeline repairs and management cost, N133.06 billion for crude and product losses.

According to the report, Domestic Crude Allocation for 2018, was 107.63 million barrels, out of which 13.581 million barrels (13%) were delivered to the refineries, 94.045 million barrels (87%) were exported under the Direct Sale Direct Purchase (DSDP) arrangement and that NNPCL was expected to make remittances within 90 days.

The DSDP agreement was a scheme introduced by NNPC Ltd in which oil ompanies lift crude oil and bring in the same value in refined products into the country.

 The NEITI boss in his presentation said that within the transaction rules, the NNPC was expected to comply with the 90 days’ payment terms in remitting the proceeds of federation crude, and alleged that the state-owned oil company consistently defaulted. 

Orji said, “NEITI’s report examined the pattern and consistency of remittance of sales proceeds into the designated bank account (CBN/NNPC crude oil and gas revenue naira account) by the NNPC”.