ABUJA — Former governor of Kwara State, Senator Bukola Saraki,
who claimed Monday, that Nigeria was spending $32 billion on non-
existing oil subsidy operators, has explained that he arrived at the
figure from the monthly and yearly payments to the operators by
the Petroleum Product Pricing and Regulatory Agency, PPPRA.
This came as the Department of Petroleum Resources (DPR) vowed
to revoke the licence of any filling station that sells petroleum
products above the stipulated price in spite of the current scarcity,
saying the Federal Government has not increased the price of fuel.
Senator Saraki, who represents Kwara Central in the Senate, had
argued on Monday that the fuel subsidy management in the country
was a very big platform for fraud and, therefore, advocated removal
of subsidy.
Defending his claim of the loss of $32bn to subsidy scam, he
insisted that the figure he gave was authentic, telling those who
cared to know more about his claim to contact the agency for the
details.
Speaking to Vanguard, yesterday, the former Kwara State governor
simply said:
“I arrived at the amount from the calculations of the monthly and
yearly payments by the PPPRA. The monthly and yearly payments
by PPPRA will reflect that.”
He said there was nothing he would say about the oil subsidy that
will be different from what he has been saying since 2011.
According to him, “countries that are producing oil are not going
through what we are going through, because when oil was $100 per
barrel, they used the money effectively because it was clear a day
like this would come. I have been saying it that the major issue
confronting us has been the subsidy management. We are talking
about a minimum of over $32 billion over five to six years,” he
insisted.
Saraki, who regretted that the alleged fraud in the scheme was being
allowed to fester by the Federal Government, urged the incoming
administration of General Muhammadu Buhari to completely remove
fuel subsidy and restore normalcy to the petroleum sector.
He accused the government of issuing import licenses to bogus
companies totaling 82 which were being used by oil marketers and
government officials to rip off the country on a yearly basis.
He argued that it would be better to remove fuel subsidy and deliver
the sector and the citizenry from the grip of racketeers in the
industry, who would never allow things to work well because of their
personal aggrandizement.
According to him, subsidy in itself was never a problem to the
country but the bad management of it, which had been turned into a
huge racket that is causing the lingering crisis in the oil sector.
He said: “No matter what is happening now, If you go back and look
at it, the major issue that swindled us was the subsidy
management. We are talking of about minimum of over $32billion
wasted on it over the last five to six years. That is the difference
between where we are now and that time. It has impacted on our
exchange rate, it is going to impact on our infrastructure, there is
no money for capital budgets.
The latest template from the Petroleum Product Pricing Regulatory
Agency, PPPRA, the body responsible for managing the subsidy
regime indicates that a liter of petrol should ordinarily cost N143, but
the price is brought down to N87 a litre allegedly as a result of
government subsidy.
Components of the pricing regime include demurrage, freight,
traders’ margin, lightening expenses (cost of transferring products
from big tankers to lighter vessels), NPA fee, product fee, fee for
discharging the fuel, depot charges, among others.
Marketers flout DPR’s warning
Meanwhile, NOIPolls, yesterday, stated that kerosene is currently
being sold at an average of N137 per litre across the country, with
some regions buying as high as N166 per litre. This was in spite of
subsidy on the product, with the Federal Government fixing the price
at N50 per litre.
NOIPolls, in its latest weekly poll results, stated that only three per
cent of Nigerians buy kerosene at N50 per litre and less, while 97 per
cent of Nigerians buy above N50 per litre.
According to the poll, the North-East, North-West and South-West
zones pay the highest average amount of N155 per litre for the
purchase of kerosene, when compared to other zones in the
country, while the South-West zone has the largest proportion of
Nigerians who purchase kerosene from major marketers’ filling
stations at an average price of N129 per litre.
Giving a breakdown of the findings, NOI Polls stated that in the
North-Central, kerosene is sold at an average price of N141 per litre;
North-East and North-West— N155 per litre; South-East — N166 per
litre; South-South — N131 per litre and South-West — N129 per litre.
The report further noted that 96 per cent of Nigerians use kerosene
for cooking, while only six per cent of the population use the
commodity for lighting.
The poll result also revealed that only 23 per cent of Nigerians are
aware of the official pump price of N50 per litre of kerosene.
“Almost eight in 10 adult Nigerians (77 per cent) are not aware of
the N50 official pump price of kerosene. Nationwide average price
of kerosene stands at N137 per litre,” NOIPolls stated.
The NOIPolls, had a few days ago, identified corruption and
mismanagement of petroleum subsidy funds as the major factors
hindering citizens from enjoying the full benefits of subsidy.
The polling agency had in one of its survey, revealed that about 52
per cent of Nigerians who purchase Premium Motor Spirit, PMS, are
of the view that Nigerians have not enjoyed the full benefits of
petroleum subsidy.
Giving a breakdown by geo-political zones, 72 per cent of North-
East respondents claimed Nigerians have enjoyed the full benefits
of the petroleum subsidy, compared to 37 per cent of respondents in
the South-South who shared similar view and 40 per cent in the
South-West.
In the North-Central, 42 per cent of respondents believed that
Nigerians have enjoyed the benefits of petrol subsidy; 49 per cent
and 50 per cent of South-East and North-West respondents
respectively, share similar view.
This perception, according to the polling agency, may be guided by
the fact that a larger proportion of Nigerians purchase petrol at a
price above the subsidized rate of N87.
The poll further revealed that majority of its respondents blame
corruption as the key factor hindering Nigerians from enjoying the
full benefits of petrol subsidy.
Specifically, 66 per cent of the respondents identified corruption as
the factor that has hindered Nigerians from enjoying the full
benefits of petroleum subsidy; 39 per cent blamed it on poor
management of petrol subsidy, while 18 per cent blamed it on
inefficient regulatory authorities.
Furthermore, 12 per cent of the respondents blamed their inability to
enjoy the full benefits of subsidy on difference in the cost of fuel
importation; 12 per cent chose inefficiencies of petrol price control
mechanisms, while four per cent blame it on bad government/
leadership.
DPR warns
Responding to reports that marketers are selling petroleum products
above official price, the Department of Petroleum Resources (DPR)
in a statement, yesterday, said it will revoke the licences of
marketers who flout the warning. DPR in a statement said while it is
making every effort to ensure that fuel is available and reaches
every part of the nation, “it is hereby emphasised that the Federal
Government has not increased the price of fuel.
“The price remains at eighty seven Naira per litre (N87.00). Any
station caught selling above the stipulated price, will have its
licence revoked.
“No station should sell in jerry cans as there is enough fuel and for
safety reasons. Any station caught dispensing into jerry cans will be
sealed.”
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