The Comptroller-General of Nigeria Customs Service (NCS), Col. Hameed Ali (retd.), has stated that the Nigerian National Petroleum Company Limited (NNPC) cannot justify the N6.34tn annual subsidy payment on the Premium Motor Spirit (PMS) being consumed in the country daily.
Mr. Ali made the statement during his presentation to the House of Representatives’ Committee on Finance at the continued hearing on the proposed 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper on Thursday in Abuja.
He argued that, “The NNPC cannot scientifically prove the 98 million litres/day consumption it was claiming. The nation’s oil company was supplying an excess of 38 million litres of PMS daily.”
The House of Representatives’ committee had asked Ali about the like deficit of between N11tn and 12tn in the 2023 budget as proposed in the 2023-2025 MTEF/FSP.
The government is proposing a budget with an estimate of N19.76tn, while the deficit will linger between N11.30tn and N12.41tn in the 2023 fiscal year.
Earlier on Monday, the Minister of Finance, Budget and National Planning, Zainab Ahmed, who appeared before the committee complained that the government might be unable to provide for treasury-funded capital projects in 2023, especially due to dwindling revenue and annual payment of N6.34tn subsidy on petrol.
Mr Ali who blamed the NNPC on its subsidy claims, said, “I remember that last year we spoke about this. Unfortunately, this year, we are talking about subsidy again. The over N11tn we are going to take as debt, more than half of it is going for subsidy. The issue is not about smuggling of petroleum products. I have always argue this with NNPC.
“If we are consuming 60 million litres of PMS per day, by their own computation, why would you allow the release of 98 million litres per day? If you know this is our consumption, why would you allow that release? Scientifically, you cannot tell me that if I fill my tank today, tomorrow, I will fill the same tank with the same quantity of fuel. If I am operating a fuel station today and I go to Minna depot, lift petrol and take it to Kaduna, I may get to Kaduna in the evening and offload that fuel. There is no way I would have sold off that petrol immediately to warrant another load. So, how did you get to 60 million litre per day? That is my problem.
“The issue of smuggling: if you release 98 million litre in actual and 60 million litres is used, the balance should be 38 million litres. How many trucks will carry 38 million litres every day? Which road are they following and where are they carrying this thing to?”
The committee’s Deputy Chairman, Saidu Abdullahi, who chaired the hearing, decried that “funds under the subsidy scheme, which should have been used to finance capital projects, were being diverted into private pockets.”
Ali told the committee that the Service would meet its revenue projection of N2.272tn for 2022, N2.873tn for 2023, N3.540tn for 2024 and N3.752tn for 2025.
Members of the House queried the sum of N6.7bn spent on legal matters out of N7.5 billion approved in the 2021 Appropriation Act, with another N9.2bn proposed in the 2023 budget.
Ali, however, explained that, “The NCS wrote to the Presidency seeking virement of N4bn to cater for pending legal debts, adding that inadequate funds might cause the Service to pay as much as N20bn for a suit of N3bn for default.”
The lawmakers also, “tasked the CG of the NCS with ensuring remittances of 80 per cent of the operating surplus to the government coffers as prescribed by the Finance Act, adding that the Customs should propose amendment to the extant law with a view to addressing whatever concerns might arise.”