BudgIT expresses dismay at the lack of accountability and transparency by the Federal Government and the Nigerian National Petroleum Corporation (NNPC) on the amount spent on subsidy in 2016, 2017 and the first quarter of 2018. It is in the interest of the public that detailed information of the amount spent on fuel subsidies such as the beneficiaries, the pricing template for arriving at the subsidy rates and the volume of petroleum products utilised should be made open and that these transactions are carried out transparently.
The Minister of State for Petroleum Resources, Ibe Kachikwu, recently disclosed a total of N1.4tn is being spent annually by the Nigerian National Petroleum Corporation (NNPC) as the subsidy for Premium Motor Spirit (PMS). This amount is significantly more than what Nigeria intends to spend on Education in the proposed 2018 Budget (N605.8 bn).
There is a growing deficit in trust due to lack of due process in the NNPC; in March 2018, the corporation announced it spends N774m daily, roughly N23.99bn monthly as subsidy on 50 million litres of PMS consumed across the country. The public knows very little information on the beneficiaries of the subsidy payments and control process instituted to prevent theft of these funds.
BudgIT notes that the subsidy payments have been a contentious issue for the last 30 years. Analysts have called for its cancellation due to the lack of accountability and transparency in the administration of these funds. Also, there are arguments that the subsidy regime constituted double taxation on the populace who pay the actual market price for PMS due to lack of adequate monitoring by the Department of Petroleum Resources (DPR).
According to our Lead Partner, Oluseun Onigbinde, “Evidence shows that amount spent on subsidising PMS is always riddled with corruption. We noted this is 2011 prior to the elections and we are worried this opacity is preceding the 2019 elections again. We are worried at the use of public resources without legislative appropriation or requisite transparency”