FG Spends N2trn On Subsidy
The outgoing Executive Secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA), Mr. Farouk Ahmed, has disclosed the Federal Government spent over N2 rillion on fraudulent fuel subsidy claims on the Nigerian National Petroleum Corporation (NNPC), major and independent petroleum products marketers at the end of 2011.
Ahmed stated this in Abuja, Thursday, when he formerly handed over the leadership of the agency to Mr. Moses Mbaba, the agency’s most senior General Manager in charge of Administration and Human Resources.
He also stated that the price modulation regime recently introduced by the agency has yielded the total sum of N2.6 billion paid into a special account in the Central Bank of Nigeria (CBN).
Ahmed also hinted that there are possibilities that Nigerians could pay less for petrol in the second quarter going by the trend. He added: “There are possibilities of Nigerians paying less for petrol in the second quarter of the year. The Minister of State will look at all the facts pragmatically and arrive at a just figure for petrol.”
The outgoing PPPRA scribe, however, explained that the delay in handing over was informed by the need to compile a comprehensive handover note for his successor in office in view of the price modulation regime that is still at its infancy.
He said: “As at February 12, 2016, because we verify based on what was imported, about N2.6 billion has accrued to that account. The fund is still low because most of the cargoes arrived in December last year. The PPPRA has already communicated to the appropriate authorities that we are in the regime of over recovery.”
He explained that so far, N8 has emerged as the average figure for the year, saying, “indeed as at Tuesday close of market, the subsidy on petrol was N13.81kobo over-recovery.
The PPPRA would now send a debit note to every marketer that falls within that bracket to refund the money to government.
There is already an account with the CBN, which is managed by the Accountant General of the Federation where all over-recovery funds are deposited. So, there is no question about where does the money from over-recovery go.”
He explained that all the money that goes into the over-recovery account will also be used to pay for the subsidy when the price of crude oil soars in the international market.
The erstwhile Executive Secretary, hinted that the PPPRA would on March 15, begin to collate data on the trends in the industry between January
and March to determine the components of the template for the second quarter.
He added: “A meeting has been scheduled for next Tuesday with marketers on the template and whatever is arrived at will form part of the next quarter template and the PPPRA will advise the Minister of State for Petroleum Resources appropriately.”