AGF opens lid on controversial N4.194trn subsidy paid from Federation Account since 2017

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?”

While stressing the need to ensure compliance with the Committee’s position, Hon. Nkem-Abonta said: “Mr Chairman, I have a motion, you are a signatory to the Federation Account, you are and I move that for us to know the details of what we are doing, that we do not move in the dark light, that for us to know the volume, that he should get us the Crude sale account, he should give us PPMC sales account, he should give us PMS sales account and any of the accounts maintained on subsidy. So that we would be able to look at the account, the volumes and then do this that’s the only way we can, I so move.”

Speaking earlier, Chairman of the Ad-hoc Committee, Hon. Abdullahi observed that: “the money that NNPC is generating is supposed to be paid into the Federation Account, you know this money is not only for the Federal Government, but it’s also for Abia State, Ningi Local Government, the three tiers of government and other deductions.

“But before it comes, NNPC will withdraw it, they are brandishing one Supreme Court judgement or whatever. You know it’s also contestable because the opinion is that the judgement is not saying that you should grab from the source, No. pay to the government, pay to the Consolidated Revenue Fund (DRF) and then just like the Accountant General is paying to the Three Tiers of Government, that is how it will also pay to you and then you pay the subsidy.

“That is the way it would be more transparent and I think people will be satisfied that the right thing is being done. But before the thing entered into the Federation Account, they (NNPC) removed it at the source. It’s very wrong, it’s unconstitutional, and it’s in breach of the constitution.

“It supposes to be in the Federation Account and as they are doing transfers. They will now bring you the appropriation approved by the National Assembly that you should take one point something trillion for subsidy.

“Yes, that is how we approve money for the Federal Ministry of Education, but do the Federal Ministry of Education grab it from the source? Even the revenue they generate they pay to the CRF then you now transfer to them, I think that is what suppose to be done.

“So you are going to take this back and rework the paper and give us the volume against each value that is presented here. That way it will be of help to the committee and we will really appreciate the office if you can be able to do that,” he noted.

He also urged the oAGF to obtain relevant documentary evidence from NNPC on the N37 billion removed from the proceeds that it ought to remit, what is it meant for? If they say it’s for a subsidy, okay how litres and the volume, they should give you and then you supply us. We must have it from different sources because everybody is saying it’s a difficult thing, we don’t have this, we don’t have that. Look at NUPENG they brought 60 million litres but there is no details. We really need to be serious about it, even for our planning purpose,” he stressed.

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