Senate Names Fuel Subsidy Beneficiaries

David_Mark-1THE Senate yesterday named beneficiaries of the controversial excess figure on the 2011 oil subsidy as at August, 2001. The veil was lifted  at  the public hearing on the operations of the fuel subsidy scheme in the country.

Among the beneficiaries are Oando Nigeria Plc, N228.506billion; Integrated Oil and Gas Plc, N30billion; MRS, 224.818billion; Con Oil, N37.96billion; Enak Oil & Gas, N19.684billion; Bovas & Co. Nig Ltd, N5.685billion; Obat, N85billion and AP, N104.5billion.

Others are Folawiyo Oil, N113.3billion; IPMAN Investment Limited,

N10.9billion; ACON, N24.1billion;  Atio Oil, N64.4billion; AMP, N11.4billion; Honey Well, N12.2billion; Emac Oil, N19.2billion; D.Jones Oil, N14.8billion and Capital Oil, N22.4billion; AZ Oil, 18.613billion.

The rest are Eternal oil, N5.57 billion; Dozil oil, N3.375 billion; Fort oil, N8.582 billion.                                 Some construction companies were also on the list, but the committee said the companies had shut down their web sites when the probe began.

The Chairman, Senate Committee on Petroleum Downstream, Senator Magnus Abe, who took time to call the marketers and how much they have benefited from the subsidy, however differed on the amount earlier given by the Executive Secretary, Petroleum Products Pricing Regulatory Agency (PPPRA), Reginald Elijah Stanley. Instead of N1.346trillion earlier presented, the Senator pegged his findings at N1.426trillion.                         .

The PPPRA boss also gave the gross amount spent on oil subsidy from 2006 till date at N3.655trillion.

Senator Abe in his response questioned the number of petroleum marketers totalling over 100. He stressed that some of them are construction companies and “have no business importing petroleum products.”  He added that even the process that brought them on board was faulty as they did not follow proper guideline.

Also, the claim that N450 billion kerosene subsidies was owed the Nigerian National Petroleum Corporation (NNPC) by the Federal Government was debunked by the PPPRA. According to the latter, there was no such record in its books.

Earlier, the Senate had demanded from the NNPC Group Managing Director, Austin Oniwon, the cost of locally refined petroleum products as against those imported and whether there was subsidy on locally refined products.                     .

In his response, the GMD stressed that it cost between four and five dollars, depending on the exchange rate, to refine a barrel of oil, which is equivalent to 159 litres. According to him, the locally refined products equally attract subsidy but at a reduced rate compared to imported products.

“We collect subsidy on locally refined product, but it is less than what we collect on imported product. But since we do not include traders marking and other charges on imported products, it costs N11.87 less on locally refined products and N11.87 more on imported ones. An indication that NNPC makes more money on imported products than from the locally produced ones.”

On the allegation of round tripping – a situation, where importers return the locally produced product at the cost of imported, the GMD denied any knowledge of such sharp practice. “I am already under oath and it will not be in my interest to say what I don’t know about. I have not cut anybody round tripping and I would not want to speculate”, he said.                                 Among questions which did not get satisfactory answers from GMD, NNPC and Executive Secretary, PPPRA are evidence of payment of dividend accruing from the country’s joint venture with Nigeria National Liquidities (NNLG), Shell Petroleum and other companies as well as the reason the nation is not in a hurry to resuscitate existing refineries.

The only answer they managed to extract from the GMD, NNPC was that the sum of N71million was spent on turnaround maintenance for Kaduna Refinery in 2008. He also stressed that the dividend from the joint venture was expended on construction works on Brass NLG. “The data would be provided later,” he said.

He however admitted that if fully resuscitated (which is expected in the next two years), Nigerian refineries would be producing at optimum capacity of 22milion litres daily.

“In two years’ time, Nigeria would be producing at the capacity of 22million litres daily at the completion of the turnaround maintenance.”

The Committee adjourned sitting till Monday, December 12.

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