The National Economic Council (NEC) has directed its sub-committee on Forensic Audit on Revenue Accruing Revenue Agencies headed by Governor Ibrahim Dankwambo of Gombe state to interface with the Nigerian National Petroleum Corporation (NNPC) to determine the correct pricing of Premium Motor Spirit (PMS) considering the price obtainable in neighbouring countries.
This followed a presentation NNPC Group Managing Director (GMD), Maikanti Baru, to the council meeting presided over by Vice President Yemi Osinbajo at the presidential villa, Abuja on Thursday.
According to Governor Mohammed Abubakar of Bauchi state, who briefed State House correspondents on the outcome of the meeting, the NNPC GMD had briefed the council on the PMS supply and cost of under-recoveries arising from the difference between importation cost and the Petroleum Products Pricing and Regulatory Agency (PPPRA) cut off market price.
He said the Council was told that the PMS open market price was continuously shaped by crude oil price volatility in the International Market with the attendant cost under-recoveries due to the differential between actual supply and distribution.
Abubakar pointed out that only NNPC had continued to import the product as the market was no longer favorable for independent marketers.
The governor explained: “The second issue that was discussed was the issue of the scarcity of petroleum product. The problem was addressed by the Group Managing Director of the NNPC.
“The issue is of course caused by an interplay of the change rate of the Naira and the Dollar and the price of crude oil at the international market which affects the landing cost of refined products in Nigeria and in the process makes the operation of the current price regime almost impossible without some measure of nil return for whoever is in the process.
“As at today, most if not all independent marketers have stopped importing, refined products into Nigeria. It is only the NNPC that has been doing it and the NNPC has been suffering a lot of setbacks, the highest amount of under recovery.
“By under recovery, it means the interplay between the landing cost of a litre of the PMS in Nigeria and the pump price of that product. If the product lands at N170 for example and you sell at N145, immediately you know that you have an under-recovery of about N25 for each litre of fuel.
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“So he submitted his report and the National Economic Council has a committee that has been interfacing with all revenue generating agencies of the federal government under the chairmanship of the governor of Gombe State.
“That committee has been charged with the responsibility of interfacing with NNPC with a view to determining the correct price for PMS considering the price of the product in especially countries that are bordering Nigeria.
“Because that is one of the reasons that encourage smuggling of the products to these areas.”
But he insisted that NEC has no powers to determine the pricing of the product.
Governor Abubakar also revealed that the federal government may establish an Agro Rangers Corps to be trained to provide security around ranches, livestock production centres and grazing routes in the country if the recommendation of a Working Group set up by the NEC.
The working group headed by Vice President Osinbajo submitted its report and was considered by NEC at Thursday’s meeting.
Abubakar said the working group also recommended that a joint Military-Police Operation is set up to manage violent outbreak where required while also calling for more effective intelligence gathering.
He said: “The Vice President reported that the Group has met twice and formed a Technical Sub-Committee. The Sub-Committee has been given the assignment of consultations with some of the affected communities.
“The Sub-Committee is chaired by Ebonyi State Governor and the NEC Working Group will give a fuller report at the end of the work of the Sub-Committee.
“The Vice President also reported that the Working Group has noted the need for joint Military-Police Operation to manage violent outbreak where required while also calling for more effective intelligence gathering.
“The Working Group also calls for the use of the Military force to flush out bandits whose activities have been linked to the clashes, and engagement with traditional leaders to foster peace in their communities.
“Working Group also noted that an Agro Rangers Corps should be trained to provide security around ranches, livestock production centres and grazing routes.”
While noting that there have been talks about setting up cattle ranches or colonies, the government further explained: “You know there have been talks of setting up ranches, colonies, a livestock production centre etc.
“The issue is actually a problem of nomenclature. The most important thing is that some measure should be taken in attempting to settle down the herdsmen so that they will stop moving with their herds from one section of the country to the other in the process creating all the problems we are experiencing.
“So, whichever one a state government that is keying into the programme chooses, either a grazing reserve or ranch, or a livestock production centre, there is a need for rangers to be trained. Rangers that will police either ranches or grazing reserves.
“The working group made it very clear that under the provision of the Land Use Act, it is the governors of the state that superintend over land in the state. Therefore, the federal government of Nigeria is in no position and in fact the federal government will not impose on any state any type of solution, be it the ranch, grazing reserves or whatever.
“The responsibility is that of the governor because they are the ones who by law superintend over land matters.”
Abubakar said the Vice President also informed NEC that the President had approved the formation of a committee to look into the issue of rebuilding affected communities and providing welfare and other facilities as may be considered appropriate.
The committee is to be chair by the Vice President.
Deputy Governor of Lagos state, Oluranti Adegbule, briefed on the final report on the Forensic Audit of Revenue Accrued from Revenue Generating Agencies (RGAs) into Federation Account (FA), Excess Crude Account (ECA) and Consolidated Revenue Fund (CRF).
“The report observed several cases of under-remittance and a few over remittance in some cases both by identified agencies. There were also late remittances into the various accounts,” she stated.
The Special Adviser to the president on Social Investment Programme (SIP)
Meanwhile, the federal government has admitted that there is massive fraud in the Investments Programme (SIP) perpetrated by some individuals in some of the states implementing d the programme.
Special Adviser to the president on SIP, Maryam Uwais, who disclosed this during the press briefing, said the Economic and Financial Crimes Commission (EFCC) has been invited to probe the fraud.
She said only 15 percent of the N1 trillion budgeted for the Programme has been released in two years.
She said that a total of 7,812,201 Nigerians are direct beneficiaries of the programme, which include home-grown school feeding programme, conditional cash transfer, N-Power; while secondary beneficiaries – mainly farmers and cooks – are about 1,500,000.
According to Uwais, the total actual spending on SIP in 2016 and 2017 is just 15.58 percent of the budget. Half a trillion naira had been budgeted for each of the two years, meaning that only N158 billion had been released and spent.
According to her, challenges encountered so far had been “corrupt practices in the states, including shortchanging, racketeering and harassment of beneficiaries; exploitation of the vulnerable due to poor levels of literacy; insufficient awareness/publicity and logistics for monitoring the programme.”
NEC was briefed that the balance in Excess Crude Account (ECA) as at 14th February, 2018 stands at $2,317,252,449.57; balance of the Stabilization Fund Account as at 14th February, 2018 stands at N11,290,664,060.06 while the balance in the Natural Resources Development Fund as at 14th February, 2018 stands at N123,624,644,411.24.
The Accountant General reported to the Council that 23 States have access to the budget support facility.
Out of the 23, 11 States received in January 2018, the remaining 12 will soon receive.
Five out of the remaining 13, five states have now complied with the Fiscal Sustainability Plan and will be considered.
The eight outstanding States are under consideration under the 22 point requirements of the Fiscal Sustainability Plan.
N16.1 billion has been disbursed as at January 2018.
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