When the Acting Executive Secretary of Petroleum Products Pricing and Regulatory Agency (PPPRA), at a recent interactive session in Abuja told the Senate Committee on Public Accounts that a whopping N1.185 trillion was spent on fuel subsidy from 2006 to 2008, he must have felt ashamed of not only the NNPC and PPRA as an agency, but the nine blown years that the PDP has piloted the affairs of this nation.
Itâ€™s time people in government stop deceiving themselves thinking they are deceiving Nigerians. Who is NNPC and who is the Federal Government?
So from 2006- 2008, the people-oriented PDP- controlled Federal Government of Nigeria spent N1.185 trillion to subsidize fuels to alleviate the suffering of the already battered masses of the country. And out of that money, the Federal Government paid the â€śFederal Governmentâ€ť the sum of N841.536 billion representing over 71 percent of the total amount claimed to have been spent as the bridge between the actual and regulated prices of fuel products.
The NNPC or rather the Federal Government spent N841. 536 billion in three years to subsidize fuel importation and could not do anything to boost domestic refining capacity by waking up the countryâ€™s four name plate refineries and/or encouraging establishment of new ones.
Interestingly, the above buying and selling by PPPRA was done without appropriation for such expenditure (bridging subsidy) by the National Assembly within the period under review.
According to the PPPRA, the government paid N276.2 billion in 2006, N278 billion in 2007 and N633.192 billion last year as subsidy on domestically utilized petroleum products.
The very interesting part of the PPPRAâ€™s â€śAli Baba and the Thievesâ€ť story was that the Nigerian National Petroleum Corporation (NNPC), in the three years under review received from the agency the sum of N841.536 billion while oil majors and independent marketers received N330.016 billion as subsidies for fuels supplied to the Nigerian Government.
Breaking it down, the PPPRA paid a total subsidy of N272.713 billion in 2006 out of which the Nigerian National Petroleum Corporation (NNPC) got N243.603 billion while the oil majors and independent marketers received N19.212 billion.
In 2007, the people of Nigeria, through their government, paid a total subsidy of N278.86 billion; NNPC took N227.47 billion and the oil majors and independent marketers received N51.388 billion.
Last year (2008) a total subsidy of N633.192 billion was paid, out of which NNPC received N370.490 billion and oil majors and marketers received N260.08 billion.
The argument by the PPPRA was that the Federal Government is still subsidizing the pump price of petrol, despite the recent cut in its price by N5. One litre of petrol now sells for N65, down from N70.
The Petroleum Products Pricing Regulatory Agency (PPPRA) told the Senate Committee on Public Accounts that the current price of petrol ought to be N67.28. That means the Federal Government is still subsidsing petrol consumption by N2.72 per litre at the pump price of N65 per litre.
On the issue of the direct marriage between the price of crude oil at the international market and domestic fuel pricing as Nigerians were earlier forced to understand by the duo conspirators- NNPC and PPPRA, the PPPRA claimed that â€śat $147 per barrel of crude oil, what Nigerians should have been paying should have been N120 per litre, but we were all paying N70 which means that when it was $80, $90, $100 per barrel, the price was fixed at N70 per litre.
â€śSo, for Nigerians to be able to enjoy that, government needed to pay that subsidy. For example on Kerosene, which is till today sold at N50 per litre, the real price is about N83.3 which means a subsidy of N33.3 on kerosene, which is still on.
â€śBefore, the price of crude was in tandem with product prices and all the other derivatives; but in the last two years, that has not been the case and Nigeriaâ€™s case became worse in December 2008 when foreign exchange dropped from N117 to N150 to the dollar, and what that means is that you had N33 added to whatever it was that you were bringing. That is the implication.â€ť
A round of very loud applause for the PPPRA for its ingenuity in its service to the Nigerian people!
Truth be told, the continued existence of the PPPRA is one glaring test of sincerity of the Dr Rilwanu Lukmanâ€™s oil sector reforms. If the reform sets to unbundled the NNPC because the organization has over the years become a mere cost centre, it should more desperately scrap the PPPRA which since inception has continued to be even a worse cost centre or rather drain pipe than the NNPC itself.
The National Assembly should with all sincerity please serve the people of this country whom they are representing by outrightly scrapping this ill-conceived resource-draining agency. The PPPRA was solely packaged by the former President Olusegun Obasanjo to service his political loyalists during his dual role as both the president and the sole administrator of the nationâ€™s oil sector (NNPC/DPR).
The fact or rather truth is that as long as the PPPRA continues to exist as an agency of the Federal Government, no single refinery can operate optimally anywhere within this country whether government or privately-owned.
Just imagine the kind of money passing through the agency without doing anything: it does not refine, it does not even import directly at least on the surface, it does not market. The agency just exists to confuse Nigerians with the calculus of real and regulated prices of fuels and the vagaries of the global crude oil market.
IFEANYI IZEZE IS AN ABUJA-BASED CONSULTANT ON POLITICAL STRATEGY AND PUBLIC CONSULTATION (firstname.lastname@example.org)
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