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Senate sets on collision with Buhari over unapproved fuel subsidy payment

December 30, 2017

The Senate is set for a showdown with President Muhammadu Buhari over alleged payment of N26 per litre to subsidise pump price of Premium Motor Spirit, also known as petrol.

Senate Committee on Petroleum (Downstream), which was on Thursday mandated to investigate the current crisis over supply of the product, on Friday, asked how the government was maintaining a pump price of N145 per litre when the landing cost of the commodity was now N171.

President of the Senate, Mr Abubakar Bukola Saraki, had on Thursday directed the committee to cut short its recess and “immediately” convene a meeting with stakeholders in the petroleum sector over the current scarcity of petrol.

Chairman of the committee, Mr Kabiru Marafa; and Chairman of the Committee on Media and Public Affairs, Mr Aliyu Sabi-Abdullahi, who jointly addressed journalists on the matter in Abuja on Friday, stated that the Senate was set to move against anybody or organisation found to have caused the crisis.

Marafa said, “We were told that there is subsidy part of what we are going to ask is: If there is subsidy, who approved the subsidy? We are the only ones that can appropriate money (for government), nobody else. That is why the Senate spoke resoundingly before going on recess when they talked about taking $1bn (from the Excess Crude Account) to fight insurgency. Nobody can take any money without the approval of the Senate. If you do that, you are breaching the provisions of the Constitution.

“So, if you are going to provide for subsidy, you have to come to the National Assembly. We need to know and that is part of what (the questions) we are going to ask.

“Now, if they say there is subsidy, when the price (of petrol) rose to N145, the common belief by all Nigerians was that subsidy was gone and gone for the good. Now, they are telling us that the landing cost of petrol is N171 per litre.

“If it is N171, who approved the subsidy or payment of the remaining balance? Where is it buried? Who appropriated it? What are we going to do in the next few days, months and years to come? We need to address this issue squarely because a lot of Nigerians are misinformed about this subsidy issue.

“Between 2006 and the figures we have for 2016, Nigerian National Petroleum Corporation alone got N5.1 trillion for subsidy while marketers collected over N4 trillion. Put them together, we are talking of over N10 trillion spent on subsidy. I am asking, what is the impact of these monies that are being paid on our behalf to subsidise petroleum products? Why are we afraid? If we take the N10 trillion to the road sector or railway, power, agriculture, what are we going to expect?

“We need to ask some very honest questions. We should not be sentimental about these things.”

Marafa recalled that the lawmakers went on recess with the assurance by NNPC that the crisis would be resolved soon.

“But unfortunately, this issue persisted. And looking at the way things are going and the complaints from everywhere, including our constituents, the Senate President called me to ask what the situation was and what the committee was doing,” he said.

The senator also said all stakeholders in the downstream sector of the petroleum industry had been invited to the “live public investigative hearing,” disclosing that letters had already been dispatched to them.

According to him, they include Executive Secretary of the Depot and Petroleum Products Marketers Association, Executive Secretary of Major Marketers Association of Nigeria, President of Independent Petroleum Marketers Association of Nigeria, and the Department of Petroleum Resources, among others.

“While this problem is raging, we hear of accusations and counter-accusations from NNPC, IPMAN, DAPPMA, MOMAN, with letters flying all over the place about hoarding and sabotage,” Marafa said.

The lawmaker also hinted that the panel would seek a review of the supply policy adopted by the current administration.

He said, “You will all remember that this issue didn’t happen last year. Why do we have it today? We are going to look at the Direct Sale-Direct Purchase contract by the government. That is, the new policy introduced by this administration under the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu. It means direct sale of crude oil and direct sale of petroleum products.

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“It was introduced to replace the former policy called “swap,” which was to give our crude and get the products back into the country, but it was fraught with a lot of irregularities and corruption. So, when this government came in, it (swap policy) was scrapped and DSDP was introduced. The whole idea of DSDP was to ensure steady supply of petroleum products since we are unfortunate not to have our refineries working.

“We will also look at the forex allocation to the marketers, why they are not importing and why NNPC is the sole importer of petroleum products.”

Mafara also dismissed the allegation of unapproved award of contracts worth $25 billion by Group Managing Director of the NNPC, Mr Maikanti Baru, as contained in a leaked memo from Kachikwu to President Muhammadu Buhari.

While faulting the claim that the Senate’s ad hoc panel set up to investigate the allegations had allegedly “connived” with Baru to frustrate the probe into Kachikwu’s allegations, the lawmaker stated that, “there is no $25 billion anywhere.”

He further said, “This $25bn we are talking about is what the nation earns from the sale of crude oil. Nobody got any contracts of $25 billion or whatever billion dollars. Nobody! I am telling you here and I want it challenged by anybody who has any facts that there was something like that.”

When asked if President Buhari, being the holder of the portfolio of the Minister of Petroleum Resources, would be invited to answer questions on the fuel crisis, Marafa argued that the President had delegated the powers of the office to Kachikwu, who is also Chairman of the Board of NNPC.

The senator also stated that Buhari had not breached any part of the law by appointing his Chief of Staff, Mr Abba Kyari, as a member of the NNPC board, noting that the President could appoint his family members into the board and the Senate would not be bothered by the appointment.
In his comments, Sabi-Abdullahi expressed the apology by the Senate to Nigerians for the hardships they had suffered during the crisis.

He said, “At all times, the 8th Senate will never fold its hands or stand aloof while Nigerians are in pain. I want to say it without any fear of equivocation that we have always stood on the side of the people because as their representatives, anything that touches them touches us.

“So, on behalf of the 8th Senate, we want to apologise to Nigerians that this unfortunate episode ever happened. But we want to assure them that we are going to be on top of the situation. We will definitely see what we can do to help in bringing this unfortunate episode to a close.

“Even though we have seen some people going round (the country) and saying that they have found hoarders (of the product), the truth of the matter is that there is complacency and some people have abdicated their responsibilities.

“If they had been doing it on a routine basis, we should be getting reports on the fact that these sharp practices were taking place. That is what the committee will want to get down to.

“We want to assure Nigerians that this 8th Senate will ensure that nobody is spared. The moment that you are found complacent and found to be sabotaging government’s efforts; definitely, these issues will come to the fore and we will definitely ensure that justice is served.”

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