The Nigerian House of Representatives will conduct a comprehensive audit of petrol subsidy to recover $20 billion.
This is according to Honorable Ikeagwuonu Ugochinyere, the Chairman, the House Committee on Petroleum Resources (Downstream).
He made the announcement on Friday, November 3.
According to him, the committee will focus on objectives that could help the federal government to recover revenues in the oil sector. He said:
- “The committee’s specific objective is to assist the Federal Government in recovering the $20 billion revenue lost in the sector. The committee will also ensure adequate supply of domestic crude to achieve energy security.”
Hon Ugochinyere also highlighted the following goals of the committee on Petroleum Resources (Downstream):
- Prioritize early remittance of federal revenues and the recovery of unremitted funds in the near future. This aims to ensure timely remittance of government revenues and retrieve any outstanding funds not yet remitted.
- Probe subsidy beneficiaries, scrutinize loan transactions, and pre-export financing arrangements, and review loans associated with crude oil. This involves investigating the beneficiaries of subsidies, closely examining loan transactions, and financing arrangements, and assessing loans linked to crude oil.
- Examine the direct sales, and direct purchase method, and evaluate the use of crude for importing refined petrol and other related value chains.
- Collaborate with relevant committees in the upstream, mainstream, gas, and petroleum training fund sectors to achieve specific objectives.
- Assess actions taken before and after the implementation of the Petroleum Industry Act (PIA), evaluate the status of national assets, and ensure energy security.
- Investigating the level of competition in the downstream sector as envisioned in the Petroleum Industry Act.
- Focus on addressing the challenge of NNPC’s dominance as the main importer of petrol, deviating from the PIA’s vision of diverse downstream operators.
- Tackling the difficulties associated with providing domestic crude to modular and local refineries, in line with the constitutional provision set forth in the Petroleum Industry Act.
What you should know: President Bola Ahmed Tinubu officially announced the end of petrol subsidy during his inauguration on May 29, 2023.
Note that in February 2023, prior to the petrol subsidy removal, the Nigerian National Petroleum Company Limited said it was paying up to N400 billion monthly for petrol subsidy and this was draining the company’s resources.
In February 2023, Mele Kyari, the Group Chief Executive Officer of the NNPCL had said:
- “In current data terms, three days ago, the landing cost was around N315/litre. Our customers are here; we are transferring to each of them at N113/litre.
- “That means there is a difference of close to N202 for every litre of PMS we import into this country. In computation, N202 multiplied by 66.5 million litres, multiplied by 30 will give you over N400 billion of subsidy every month.”
