The Guardian
Email YouTube Facebook Instagram Twitter WhatsApp

‘Why fraud may persist in fuel subsidy regime’


Oil prices drop on chinese, US data. PHOTO:

Oil prices drop on chinese, US data. PHOTO:

GOVERNMENT’s silence on what period the N415 billion earmarked for subsidy payment is expected to cover is generating disquiet in the oil sector.

The Guardian learnt yesterday in Abuja that there is no clear-cut explanation on how the N415 billion was arrived at by officials of the Federal Ministry of Finance and Petroleum Products Pricing Regulatory Agency (PPPRA), and for what period of the year.

A marketer who craved anonymity told The Guardian in Abuja that there was fear in the industry that the current administration seemed to be on its way to making the same mistakes previous governments made by effecting subsidy payments without data gathering and analysis of information provided by marketers.

The marketer added that continuation of this practice will lead to government paying more on subsidy very soon when marketers finish studying the ‘body language’ of President Muhammadu Buhari.
He said: “Nigeria consumes between 30 and 35 million litres per day with the PPPRA claiming there is N10.58 subsidy per litre. It comes to about N385million subsidy a day at N11 per litre. That also comes to N11.5billion every month, which translates to about N138.6billion annually. The natural question to ask is how did government come to N415billion? This figure is enough to pay for the entire fuel subsidy Nigerians will need in about four years if the price of crude oil in the international market continues to hover around 60 to 70 dollars per barrel. At least in the last six months since this government came to power, the price of crude oil has not topped 60 dollars.”

He added that what is expected of this government is to bring change to the fuel subsidy regime. “We all know that petrol is not imported everyday. In fact, the importation, according to the PPPRA, is done quarterly. So, government needs to do a forensic analysis on the subsidy payment to see where the leakages are and how to block them without subjecting Nigerians to hardship occasioned by unavailability of petrol.

“Nigerians must be told what is the timeframe for the payment of the N415 billion. How long is it expected to cover? We reserve the right to know. We need to know why the subsidy payment is going up while crude oil price is going down. If the calculations are not done neatly, an avenue to blackmail government into paying any figure marketers present will emerge again and the nation would be in cycle of unending fuel scarcity that may take months to disappear.”

While blaming lack of long-term planning for the inability of Nigeria to build new refineries after years of suffering fuel shortage, former President of the Petroleum and Natural Gas Workers Senior Staff Association (PENGASSAN), Peter Esele, explained that the tendency of successive governments to do ad hoc planning has been hurting the economy.

Receive News Alerts on Whatsapp: +2348136370421

No comments yet