According to Col. Hameed Ali (retired), Comptroller-General of the Nigeria Customs Service, the Nigerian National Petroleum Company Limited (previously the Nigerian National Petroleum Corporation) cannot justify the amount of Premium Motor Spirit (petrol) consumed in the nation each 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 between N11 trillion and N12 trillion that was suggested 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 projections totaling N19.76 trillion.
Zainab Ahmed, the minister of finance, budget, and national planning, testified before the committee earlier on Monday and expressed concern that the government might not be able to support capital projects funded by the treasury in the coming year, particularly in light of declining tax revenues and an annual payment of N6.34 trillion in fuel subsidies.
However, the NCS boss faulted the NNPC on its subsidy claims, saying, “I remember that last year we spoke about this. Unfortunately, this year, we are talking about subsidies 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 the smuggling of petroleum products. I have always argued this with NNPC.”
Ali added, “If we are consuming 60 million litres of PMS per day, by their 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 litres per day? That is my problem.
“The issue of smuggling: if you release 98 million litres 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 presided over the hearing, decried that funds under the subsidy scheme, which should have been used to finance capital projects, were being diverted into private pockets.
Meanwhile, the Customs CG 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.
The lawmakers 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 the 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 amendments to the extant law to address whatever concerns might arise.
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