N1tn spent illegally on kerosene subsidy –Tambuwal

The  Speaker of the House of Representatives, Mr. Aminu Tambuwal, said on Tuesday that available records indicated that the Federal Government spent over N1tn  on kerosene subsidy between 2010 and 2013.

Tambuwal said in spite of the expenditure not having the approval of the National Assembly, the product was not available   for “suffering Nigerians” to buy.

He also noted that the product was not sold in any part of the country at the subsidised price of N50 per litre.

Tambuwal spoke in Abuja as the House Committee on Petroleum Resources (Downstream) opened an investigation into subsidy payments on kerosene between 2010 and 2013.

The committee, which is headed by Mr. Dakuku Peterside, has the mandate to establish the actual amount spent on subsidy by the Nigerian National Petroleum Corporation, the sole supplier of the product, and how it got the authority to subsidise it.

The Speaker, who was represented by his Deputy, Mr. Emeka Ihedioha, said, “Curiously, since there were no budgetary provisions for subsidy on kerosene, the people of Nigeria will obviously be interested in knowing the source of funding of kerosene  subsidy and on whose authority such money was appropriated.”

But, the Group Managing Director of the NNPC, Mr. Andrew Yakubu, and the Managing Director of the Pipelines and Products Marketing Company, Mr. Haruna Momoh, evaded questions on the actual amount of money spent on subsidy during the years under review.

Yakubu at first declined to make the presentation of the NNPC, yielding the floor to Momoh to address the committee on kerosene importation and distribution.

Although he told the committee that he would adopt the presentation of Momoh, lawmakers insisted that he must answer questions on policy issues after the PPMC-MD would have concluded his submissions.

Momoh gave the figures of kerosene supplied in the respective years as follows: 2010 (2.5 trillion metric tones); 2011 (1.9 trillion  metric tonnes); 2012 (2.6 trillion  metric tonnes); and 2013 (2.6 trillion metric tonnes).

He explained that the figures represented both the imported product and the quantity supplied by local refineries.

Specifically, Momoh gave the imported figures as 1.7 trillion metric tonnes (2010); 1.6 trillion metric tonnes (2011); 1.8 trillion  metric tonnes (2012); and 2.1 trillion metric tonnes (2013).

He told the committee that the job of the agency ended with the bulk supply of the product, adding that it was not answerable for how it   reached  the end-users.

Momoh  said this leg of the distribution chain was the responsibility of  “regulatory agencies,” which must liaise with law enforcement agencies to “ensure seamless distribution of kerosene.”

“The PPMC does not own a single filling station in the country,” he told the committee.

However, he offered explanations on why the product was scarce in spite of the huge statistics on supplies and why there  were challenges in distribution.

Momoh claimed that substantial quantity of kerosene was diverted to neighbouring countries to be sold at higher prices because Nigeria subsidised the supply.

He also said that kerosene is  used for road projects in the construction industry.

Momoh added that other factors like the use of kerosene as aviation fuel and the activities of vandals, who frequently destroyed pipelines, compounded the distribution challenges.

Momoh observed that there was over-  reliance on kerosene for domestic purposes and  therefore urged Nigerians to consider liquefied natural gas as a cheaper alternative that could force down the price of kerosene.

When asked to disclose the actual subsidy spent on kerosene in the four years under review, Momoh redirected the question to the GMD.

“It is the GMD that will answer that question because the PPMC is only an arm of the NNPC doing the field work.  We don’t have information on budgetary approvals,” he  said.

When the committee  put the question on actual subsidy spending to the NNPC GMD, he claimed that the corporation had yet to compute the figures for the four years.

He said, “We have not computed the numbers on  the budget and subsidy on kerosene. We have the numbers, but I will say that we don’t have the exact numbers here. I will go back to my documentation and relevant departments to come back again.”

Yakubu  insisted that the subsidy on kerosene was never removed, but he consistently parried questions on how the NNPC got the authority to subsidise the product.

PUNCH NG