The senate has revealed that Nigeria spent N11 trillion on fuel subsidy payments in the last six years.
The senate disclosed this at its plenary yesterday as it approved the payment of N129, 048, 358, 444.11 final subsidy arrears to 67 oil marketing companies.
The senate said subsidy is a “drain on the economy” and called on the federal government to build refineries.
The senate’s resolutions were sequel to the consideration of a report of the Senator Kabiru Marafa-led Committee on Petroleum, Downstream on Promissory Note Programme and a Bond Issuance to Settle Inherited Local Debts and Contractual Obligations to Petroleum Marketers.
The senator had, in his 11-page presentation, said Nigeria had since 2013 spent over N11 trillion to settle outstanding fuel subsidy claims.
However, he said the approval of the latest payment to 67 oil marketers ended the issue of subsidy arrears claims by oil marketing companies.
Marafa observed that there were differences in submissions made by the federal ministry of finance, Petroleum Products Pricing Regulatory Agency (PPPRA) and oil marketers.
He said all the subsidy arrears claims were based on three inter-related elements: subsidy, forex differentials and bank interests on unpaid claims.
“That the recent request computation is based on one of the already identified elements (forex differential).
“That due to scarcity of forex within the period, oil marketing companies were allowed to source forex outside CBN rate to enable them to meet the country’s petroleum products demand.
“That NNPC Retail get their petroleum product allocation directly from PPPMC at already subsidised rate and so does not require forex to transact its business.”
Some of the beneficiary oil marketers and the amount approved for them include: Total Nigeria PLC N13.7 billion; Northwest Petroleum, N11.4 billion; Masters Energy, N10 billion; MRS Oil Plc, N8.8 billion and Sahara Energy, N8.4 billion.
Others are: MRS Oil & Gas Limited, N6.3 billion; NIPCo Plc, N4.2 billion; Forte Oil, N3.9 billion; DEEJONES Petroleum & Gas, N4.1 billion; Emadeb, N4 billion; Sulphur Streams Ltd, N147.52 million; Eterna Plc, N704,89 million; Ceoti Limited, N88.20 million; and ASB Investment Company, N38.85 million; among others.
