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24 Million Litres Of Subsidized Fuel Diverted Daily - PPPRA

Category: Frauds & Scandals

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24 Million Litres Of Subsidized Fuel Diverted Daily - PPPRA

Abuja, January 18, 2012 /The Will


The House of Representatives ad hoc committee investigating the fuel subsidy management today queried the Nigerian National Petroleum Corporation (NNPC) and the Petroleum Products Pricing Regulatory Agency (PPPRA) over a differential of 24 million litres of petrol imported into the country daily.


According to the committee chairman, Hon. Farouk Lawan, while the country pays for and imports 59 million litres of pms daily, only 35 million litres are being consumed within the country whereas the balance of 24 million is allegedly diverted to neighbouring countries.

Lawan who made the revelation following the submission of the executive secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA), Stanley Reginald confirming that the country imports 59 million but consumes only 35 million litres assured that the committee would get to the root of the matter.


According to Lawan, “the difference between the discharge and the consumption is actually 24 million litres per day. Because if the subsidy you pay is for 59 million litres per day and the consumption is 35 million litres per day then you are talking of 24 million litres which Nigerians are paying for but for which they do not consume.”


Stanley Reginald had in his presentation told the committee that the country pays for 59 million litres per day but consumes only 35 million litres. The Executive Secretary could not however provide satisfactory answer to the query and was asked to forward relevant documents regarding payments and approval for subsidy.


He admitted that the paid subsidy include the cost of five days demurrage and other cost elements on imported fuel based on the approval of the PPPRA Board.


Reginald, who assumed office barely five weeks ago, explained he appointed an independent inspector based on his previous experience in the oil sector and that there was no need for the Customs Service to verify the volume of imported fuel since there was no need for payment of duty on petroleum products.


Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Austen Oniwon Wednesday alerted that the full benefit of the proposed building of three new refineries and the turnaround maintenance (TAM) of the existing four refineries may not be realised if the spate of vandalism of oil pipelines is not eradicated.

This is just as the House ad hoc committee on subsidy management has vowed to unmask the scam in the payment of subsidy on 24 million litres excess of discharged fuel per day, which the PPPRA cannot account for.


The GMD who gave this indication at the ongoing investigation of ad-hoc committee disclosed that the turnaround maintenance of the four refineries would be solely financed by the NNPC from its internally generated revenue (IGR).


Oniwon who assured that the new refineries would ensure adequate supply of petroleum in the country explained that the proposed turn around maintenance and rehabilitation of the Port Harcourt refinery would be completed by December this year.


He said that of Kaduna refinery would commence as from January and be completed by the end of first quarter of 2013, while the Warri refinery would be completed by last quarter of 2014.

He noted that the four refineries on completion would raise the capacity utilisation of the existing refineries from 30 percent to 90 percent; but however emphasised the need to combat vandals of oil pipelines especially in Auchi, Okene, Lokoja, Abaji, Gombe, Ogoni area and other parts of the country.


He explained that the Corporation pays additional cost of $5 per barrel to keep the Port Harcourt and Kaduna refineries functional, adding that previous efforts by the corporation to fix the vandalised pipelines across the country were futile, as army, police and communities engaged by the corporation failed to ensure safety of the pipelines.


He added that the corporation recovered the sum of N15 billion from oil marketers during the period when the price of crude oil nosedive and that the demurrage cost was built into the subsidy.

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