BudgIT, a Nigerian civic social enterprise, has asked the federal government to release detailed information on the N1.4 trillion spent as subsidy payment annually as disclosed by Ibe Kachikwu, the minister of petroleum resources.
In a press statement made available to TheCable Petrobarometer on Wednesday, the organisation said the federal government “must also release the full list of beneficiaries, pricing template for arriving at the subsidy rates, and the volume of petroleum products utilised” in the country.
According to BudgIT, “the N1.4 trillion spent as subsidy payment for Premium Motor Spirit (PMS), surpasses the proposed 2018 budget for Education, which stands at 605.8 billion.”
The organisation said if the federal government makes the details on subsidy payment public knowledge, it would mean due process is being followed, and this would make for transparency and accountability.
“The minister of state for petroleum resources, Ibe Kachikwu, recently disclosed a total of N1.4 triliion being spent annually by the Nigerian National Petroleum Corporation (NNPC) as the subsidy for Premium Motor Spirit (PMS),” the statement read.
“This amount is significantly more than what Nigeria intends to spend on Education in the proposed 2018 budget (605.8 billion).
“There is a growing deficit in trust due to lack of due process in the NNPC; in March 2018, the corporation announced it spends N774 million daily, roughly N23.99 billion 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 further noted that subsidy payments have been “a contentious issue” for the last 30 years, with analysts in the industry calling for its termination.
It argued that the subsidy regime “constitutes 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).
Commenting on the issue, Seun Onigbinde, lead partner at BudgIT said: “Evidence shows that the amount spent on subsidising PMS is always riddled with corruption. We noted this in 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.
“BudgIT understands that NNPC in recent times has initiated a couple of actions in trying to meet up with the global standards of transparency and accountability including actions like publishing its monthly report on its financial and operational activities.
“Notwithstanding this, the lack of information on the subsidy regime, including the amount paid and the beneficiaries, are locked away from public scrutiny.
“Therefore BudgIT urges the federal government, NNPC, DPR, national assembly, the National Economic Council (NEC), and state governments to release details on the breakdown of the amount spent on subsidy, the beneficiaries, the pricing template for arriving at the subsidy rates and the volume of petroleum products utilised.
“For increased efficiency of the NNPC, there is an urgent need to plug the loophole created by the subsidy regime in the oil sector; we call on all Nigerians to demand appropriate systems to ensure that oil revenue is judiciously managed and utilised for the good of the people.”