19th February, 2014
The recent investigative hearing on the supply, subsidy and distribution of kerosene in the country, organised by the House of Representatives Committee on Petroleum, Downstream, has further exposed the corruption and opacity that surround the subsidy payment on kerosene by the Nigeria National Petroleum Corporation, NNPC.
While it has become obvious that the subsidy initiative on kerosene has not been in the interest of the masses, it is high time the Federal Government stopped the shady deal.
At the investigative hearing, it was revealed that the Federal Government spent N634bn to subsidise the retail price of kerosene between 2010 and 2013.
As corroborated by the Chairman, House Committee on Petroleum (Downstream), Dakuku Peterside, in 2010, about N110bn was spent on kerosene subsidy. The sum of N324bn was spent on the subsidy in 2011, while N200bn, though yet to be reconciled, was spent in 2012. This implies a total of N634bn spent in the last three years.
As reiterated by Speaker, House of Representatives, Alhaji Aminu Tambuwal, the country has spent at least N1 trillion over the past four years to subsidise kerosene, yet the product is neither available nor is it sold at the official price. Things are not helped by the fact that nobody has been able to tell us what our kerosene consumption volume is per annum. This attitude by government officials, who continue to treat the issue of kerosene consumption volume as if it were a national secret is quite deplorable.
Though NNPC and other agencies involved have offered several explanations to justify why such huge sums are spent on subsidising the product, Nigerians cannot understand why it is difficult to buy the product at the official price of N50 per litre recommended by the NNPC. Availability of the product has been a serious issue until recently.
How can NNPC justify the N150 it spends per litre in importing kerosene knowing that the product sells in the market at the retail price of N150-N200/litre? Nigerians will like to know the source of the kerosene subsidy funds when there was no provision for kerosene subsidy in the budget. Despite a presidential directive that such should be stopped, the agency went ahead.
The N4.77tn 2014 budget proposal presented to the National Assembly by President Goodluck Jonathan did not make appropriation for kerosene subsidy. Will the agency still continue with its usual arrangement now that Nigerians are aware of the racketeering? Engaging in extra-budgetary activities, by all standards, is an indication of indifference to transparency and accountability.
Subsidy, in the real sense, ought to be a palliative measure to cushion the effect of buying at exorbitant prices. But it is a known fact that the so-called kerosene subsidy is a corrupt scheme designed to be enjoyed by a cabal.
Citing Nigeria Ports Authority, NPA’s record, the CBN Governor, Lamido Sanusi, said NNPC imports about four to six vessels of kerosene monthly and that the Federation Account loses $100 million monthly due to racketeering in the industry. How can the country progress if such a huge sum is spent without proper accountability?
NNPC holds the monopoly of kerosene importation, but many marketers have faulted this arrangement which has been dogged by a lack of transparency on the subsidy issue. This makes a review of NNPC’s monopoly expedient. The Federal Government should take a cue from the Indonesian government, which halted its $9 billion kerosene subsidy to prevent it depleting its resources.
While further probe and reconciliation of accounts are ongoing, the mystery surrounding the disappearance of kerosene subsidy should be thoroughly investigated. The House Committee on the issue has been able to show so far that it means business. But it needs to avoid a repeat of the bribery allegation that trailed the Farouk Lawan committee.
.This is the editorial opinion of P.M.NEWS newspaper