The House of Representatives at its plenary session on Wednesday, 17 January 2018 resolved that Mr. Emmanuel Kachikwu, Minister of State for Petroleum Resources and Mr. Maikanti Baru, Group Managing Director of the Nigerian National Petroleum corporation (NNPC) appear before the House Committee of Finance and Petroleum Downstream to proffer explanations to the Committee on how fuel subsidy payments are being made by the Corporation despite the absence of its allocation in the 2017 budget.
Presenting the motion on the floor of the House Hon. Karimi S. Sunday (PDP:Kogi) explained that Professor Yemi Osinbajo, Vice President of the Federal Republic of Nigeria and the Minister of State For Petroleum Resources had in December 2017 admitted that the current landing cost for petrol was N171 Per litre despite the Federal Government’s official rate of 145 per litre. In other words, the NNPC was paying a differential of N26 per litre for consumers despite the Federal Executive’s position that it had removed petroleum subsidy and its absence from parliamentary appropriation in the 2017 Budget.
Speaking further, he drew attention to NNPC’s admittance in January 2017, where it conceded that fuel subsidy has returned after the official rate of N145 fuel per litre was deemed unsustainable. He said that NNPC recorded an under recovery of N46.86 Billion between January and March 2017 alone and that over 300 Billion had been expended on the petroleum subsidy in 2017. He explained an “under recovery” in downstream petroleum marketing parlance to mean that the expected open market price of PMS, (which includes the cost of importation and distribution of the commodity such as marketers margins, landing cost and freight cost) is below the approved retail price.
Hon. Sunday also expressed concern that the payment of subsidy by the NNPC was illegal and unconstitutional when viewed in the context of section 80(4) of the 1999 Constitution (as amended) which “prescribes that no monies shall be withdrawn from the Consolidated Revenue Fund or any other public fund of the federation, except in a manner prescribed by the National Assembly”. He stated that that non-appropriated expenditure on petroleum subsidy, no matter how well intended was illegal since it was susceptible to corruption, embezzlement and mismanagement where not subjected to the approval and scrutiny of Parliament.
The House of Representatives also urged the Executive to make provision for subsidy payment in the 2018 Appropriation Bill, where it deemed it fit to continue subsidy payment.
