According to Col. Hameed Ali (retired), Comptroller-General of the Nigeria Customs Service, the Nigerian National Petroleum Company Limited (previously known as the Nigerian National Petroleum Corporation) cannot justify the amount of Premium Motor Spirit (petrol) being consumed in the nation every day to support the over N6.34tn subsidy payment on the good each year.
In his presentation to the House of Representatives Committee on Finance on Thursday in Abuja during the ongoing hearing on the proposed 2023–2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, Ali claimed that the NNPC could not scientifically support the 98 million liters/day consumption it was claiming, asserting that the country’s oil company was supplying an excess of 38 million liters of PMS daily.
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The committee had questioned Ali on a similar deficit in the 2023 budget that ranged from N11 trillion to N12 trillion and was outlined in the 2023-2025 MTEF/FSP.
The deficit in the 2023 fiscal year is expected to range between N11.30 trillion and N12.41 trillion, according to the federal government’s proposed budget, which has estimates totaling N19.76 trillion.
When she testified before the committee earlier on Monday, Zainab Ahmed, the minister of finance, budget, and national planning, bemoaned the possibility that the government might not be able to fund treasury-funded capital projects the following year due to declining tax revenues and the annual payment of N6.34 trillion in gasoline subsidies.
However, the NCS boss faulted the NNPC on its subsidy claims, saying, “I remember that last year we spoke about this. Unfortunately, this year, we are talking about subsidy again. The over N11tn we are going to take as debt, more than half of it is going for subsidy. The issue is not about smuggling of petroleum products. I have always argue this with NNPC.”
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Ali added, “If we are consuming 60 million litres of PMS per day, by their own computation, why would you allow the release of 98 million litres per day? If you know this is our consumption, why would you allow that release? Scientifically, you cannot tell me that if I fill my tank today, tomorrow, I will fill the same tank with the same quantity of fuel. If I am operating a fuel station today and I go to Minna depot, lift petrol and take it to Kaduna, I may get to Kaduna in the evening and offload that fuel. There is no way I would have sold off that petrol immediately to warrant another load. So, how did you get to 60 million litre per day? That is my problem.
“The issue of smuggling: if you release 98 million litre in actual and 60 million litres is used, the balance should be 38 million litres. How many trucks will carry 38 million litres every day? Which road are they following and where are they carrying this thing to?”
Saidu Abdullahi, the committee’s deputy chairman, who oversaw the session, bemoaned the diversion of subsidy funds into private wallets when they were intended for capital projects.
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According to the Customs CG, the Service would reach its income projections of N2.272 trillion for 2022, N2.873 trillion for 2023, N3.540 trillion for 2024, and N3.752 trillion for 2025.
In addition to the N9.2 billion proposed in the 2023 budget, the lawmakers questioned the N6.7 billion that was spent on legal affairs out of the N7.5 billion that was approved in the 2021 Appropriations Act.
Ali clarified, however, that the NCS has written to the Presidency asking for a virement of N4 billion to cover outstanding legal costs, adding that a lack of money might force the Service to pay as much as N20 billion for a suit of N3bn for default.
The parliamentarians also mandated that the CG of the NCS ensure the submission of 80% of the operational surplus to the government coffers in accordance with the Finance Act. They also stated that the Customs should propose a change to the current law in order to address any potential issues.
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