How N4.194trn Subsidy was Paid From Federation Account Since 2017… AGF

Finally, the office of Accountant General of the Federation (oAGF) on Tuesday opened the lid on the full details of the N4.194 trillion fuel subsidy paid to oil marketers between January 2017 and June 2022.

A breakdown of the subsidy payments/deductions from the Federation Account computed by the oAGF through the Federation Account Department for the period under review showed that the sums of N126.539 billion were paid from January-December 2017; N691.586 billion was paid from January-December 2018; N537.209 billion paid from January-December 2019; N133.625 billion paid from January-December 2020; N1.159 billion paid from January-December 2021 while N1.545 trillion was paid between January and June 2022.

The details of the subsidy payment were contained in the 2-page documents submitted by the Director Overseeing the oAGF, Mr Sylva Okolieaboh to the House of Representatives Ad-hoc Committee inaugurated to ‘Ascertain the actual daily consumption of Premium Motor Spirit (PMS) in Nigeria’, chaired by Hon. Abdulkadir Abdullahi.

The lawmakers during the scrutiny of various documents submitted by various stakeholders uncovered subsidies claimed by oil companies while NNPC was the sole importer of PMS, and queried the presentations made by NNPC subsidiaries.

Hon. Abdullahi said: “It is surprising now to see that oil companies are reeling out figures of importation, in fact, more than what NNPC imported in 2020. I need some clarifications and if that happened, do they import it without any form of subsidy or what actually happened?”
In his response, the Executive Secretary of Nigeria Extractive Industries Transparency Initiative (NEITI), Mr Ogbonnaya Orji said: “Why NNPC took charge of most of the importations, we are also aware of other partnerships and arrangements they have with IOCs. But I will like the Director of Technical Services to speak more on that.”

According to the NEITI delegation, NNPC as the sole importer of PMS into the country had SWAP and other arrangements with the IOCs with a view to reducing its exposure to the issues.

He explained that “NNPC had arrangements with some of the oil marketers as a stop-gap for the importation of PMS in 2020 but what we would do is we will provide you information on those things imported and the vessels and everything so that you will be cognizant of those that did the importation. Like I said this is the data that we got from PPPRA then and NNPC also, so we collated those data from the importers themselves.

“So we will provide you with the information of all those that constituted the companies that did those importations during that period which is about 16 billion litres.”

He however noted that the PPPRA is the only agency that could ascertain the subsidy payment and any variance adding that NNPC as a major importer as a last resort, should be held accountable since it has the required data.

While expressing grave concerns over the non-provision of details of the actual volume of litres of premium motor spirit (PMS) distributed by the Nigerian National Petroleum Corporation (NNPC) Limited that amounted to the N4.194 trillion fuel subsidy deductions from the Federation Account, the lawmakers directed the oAGF Director to provide the statement of accounts of the Federation Account alongside the Crude Oil Account statements.

In his remarks, Hon. Uzoma Nkem-Abonta (PDP-Abia) who queried the rationale behind the refusal of the regulatory agencies to provide the details of the actual volume of PMS consumed daily in the country, stressed the need for scrutiny of relevant bank documents.

Worried by the inconsistency in the reports submitted to the Committee by the oAGF, he said: “Could it be the reason why all the Accountant-Generals are being sacked or removed, even this acting one for the reason of fraud?” he queried.

Hon. Nkem-Abonta maintained that the controversies surrounding payment of “subsidy which is the topical issue in Nigeria, we are seeing the amount you paid in subsidy without getting the correspondent volume and you are arguing. So the subsidy you paid is meant for, what volume?

“That is the basis for this investigation. And I ask, could that be the reason why most of the Accountant generals are removed? I’m not the one removing them, they are removing them on issues based on fraud and why are you taking exception, is it a lie that Accountant generals are being removed for fraud?”