Saturday, February 27, 2021
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Senate probes NNPC over $3.5bn subsidy recovery fund

The Senate, yesterday, resolved to set up an ad hoc committee to  investigate the $3.5 billion Subsidy Recovery Fund allegedly created by the   Nigerian National Petroleum Corporation (NNPC) and solely managed by its Group Managing Director and the Executive Director, Finance.


The decision to carry out the investigation on the alleged Subsidy Recovery Fund followed a point of order raised by the Senate mi-  nority leader, Mrs. Abiodun Olujimi, drawing the attention of the apex legislative chamber to the said fund. Olujimi, who presented the matter to the chamber for consideration, cited Orders 42 and 52 of the Senate Standing Orders 2015 (as amended), noting that she was alarmed by the existence of such fund and the mode of its management.

She expressed concerns that the All Progressives Congress (APC)-led Federal Government had to cancel subsidy that was usually provided for in the nation’s annual budgets since 1999, only to turn round to set up a fund that was never appropriated for by the National Assembly.


Her words: “My point of order focuses on $3.5 billion earmarked as subsidy recovery fund by the NNPC. Since 1999, there has always been a budget for fuel subsidy, but this has been jettisoned by the current government, which leaves this administration in a very dire strait.


“What is happening now is that there is a fund named as subsidy recovery fund being managed by only two individuals of the NNPC; that is the Group Managing Director and the Executive Director, Finance. This fund is too huge for two people to manage; it is too huge to manage without appropriation or recourse to any known law of the land.


“Mr. President, during your remarks after the passage of the 2018 budget, you mentioned that there should be a budget for subsidy that should be brought before the National Assembly. That has not been done. It is, therefore, obvious that the $3.5 billion is slush fund which will just be managed by two individuals, and that is not correct.


“The Senate should, therefore, compel the NNPC to come and explain before the Senate Committee on Petroleum Downstream why it should be so, and what has happened to the fund that has been used so far, and the new terminology now being used under recovery rather than subsidy.”


Reacting to the point of order, President of the Senate, Dr. Bukola Saraki, suggested that the Committee on Downstream, headed by Senator Kabiru Marafa and the Leader of the Senate, Ahmad Lawan, should investigate the matter and report back to the Senate next week.


He said: “I want to just say that in the light of the enormity of the matter before us, whereby we are talking of subsidy of $3.5 billion, I want to suggest that we direct the Leader and the chairman of the Committee on Downstream to urgently summon those in NNPC who are responsible to look into the matter and come back to us with a report to debate within four days.”


However, Senator Ali Ndume countered Saraki, arguing that since the committee did not do its oversight, no member of the committee should participate in the investigation to avoid being biased in their judgement.

Following this argument, the Senate unanimously resolved to set up an ad hoc committee, which was yet to be constituted, to carry out an unbiased probe into the matter.


However, NNPC Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, in a statement last night in Abuja, explained that at the hit of the shortage of products supply at the close of last year, the National Assembly asked the NNPC to do everything possible to stem the hiccups.


Ughamadu revealed that accordingly, NNPC initiated the move to raise a revolving fund of $1.05 billion, since the corporation was, and still is, the sole importer and supplier of white products in the country.


The NNPC spokesman said ever since, the fund had been domiciled in the Central Bank of Nigeria (CBN), saying at no time was it in the custody of the NNPC.


Ughamadu said the fund, dubbed the National Fuel Support Fund, had been jointly managed by the NNPC, the CBN, the Federal Ministry of Finance, the Petroleum Products Pricing Regulatory Agency (PPPRA), Office of the Accountant General of the Federation (OGF), the Department of Petroleum Resources (DPR) and the Petroleum Equalization Fund (PEF).


Ughamadu clarified that NNPC did not independently spend a dime of the fund which he said was to ensure stability in the petroleum products supply in the country.


The NNPC spokesperson said, for the avoidance of doubt, the corporation was fully aware that it is only the National Assembly that has the statutory responsibility to appropriate on petroleum subsidy matters.



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