EMPIRICAL INTERROGATION OF THE NNPC N1.4 TRILLION SUBSIDIES PAYMENT CLAIMS.

Sincerely, no country or her leadership can truly lay claim to any honest fight against systemic corruption without sustainably instituting an enduring culture of openness, accountability, transparency and probity in the way and manner the nation’s resources are generated and dispensed .

For weeks now, I have expected the National Assembly to institute a high powered probe into the NNPC claims that they paid Petroleum subsidies of N1.4trillion/$4.6b over the last one year .

Such outrageous amount of money is enough to start and complete 1. over 1,400 kilometers of brand new Narrow Guage Rail network and infrastructure across Nigeria (892 KM Rail infrastructure from Lagos to Kano and 534km From Lagos to Owerri). 2. Fully fund 100% the second Niger Bridge and 3. Build 8 World Class Hospitals across the regions of Nigeria at $50m/N15b per hospital.

NOW LET’S EMPIRICALLY INTERROGATE THIS N1.4TRILLION FIGURE

It is on record that our average daily consumption of the Pms over the last five years has averaged 32million liters of PMS a day (recall that this figure included, those smuggled through the borders to Niger, Chad, Togo and Cameroon).

The average FOB landing cost of the Pms over the last one year has fluctuated between N 113-171 per liter.

The PPMC is currently the sole importer of this product because the FGN and her agents, against all sound/rational reasoning have deliberately refused to fully deregulate and open up the Oil and gas market to transparent interplay of market forces and to subsidize production that is more transparent instead of the opaque and sleazy consumption subsides. PPMC then sells this product to the MOMAN, DAPPMAN and IPMAN members at N117.80 per liter.

Now let’s do some basic arithmetic here . Assuming we take the upper limit figure of N171 landing cost , (which is even ridiculous ) , you will easily compute the subsidy payments made. N171 minus 117.8 will give you roughly N53. That is the average highest amount ever paid per liter as subsidies for a liter of the Pms over the last one year . In fact in some periods within this last one year, when the price of a barrel of crude oil was less than $60 and a metric ton of the Pms was around the $500 levels the subsidies paid per liter of the Pms were actually absent or less than N10 per liter .

At some periods even in the late 2015 and 2016 , the landing cost of the Pms was even lower than what the PPMC sold the product then at N112/liter to the MOMAN ,DAPPMAN AND IPMAN members . That was a period they declared profits and we all called for them.

So even if we use the highest possible subsidy amount of N53, (which is actually a very ridiculous and non common-sensical thing to do) to extrapolate for subsidy payments over the last one year , it will show clearly that N53 multiplied by 32million liters multiplied by 365 days will give us about N623billion.

SO FROM WHERE DID WE PLUCK OR MANUFACTURE THE N1.4TRILLION PAID AS SUBSIDY BY THE NNPC IN ONE YEAR ?

How come the whole subsidies thing is shrouded in so much opacity, mystery, and secrecy? Who did we pay these monies to or how did we arrive at this under recovery figure ? HOW?

How could our consumption of the Pms went up almost 100% when the economy is not experiencing any significant growth and the middle income class is even gradually being eroded . When the average disposable income of the average Nigerian is tanking out ?

How come the NASS is not aware of all these or approached to appropriate these expenses in line with the requirements of the law of the land?

Can there be any credible anti graft war in the absence of transparency, openness, accountability and sincerity? Even in the prevalent atmosphere of opacity in the disbursements of consumption subsidy ?

Honestly, we can do better than this . How come Saraki, Dogara and members of NASS are not asking the right questions ?

Why are we still keeping these down stream Oil And Gas Assets, including the refineries without fixing them in three years ?

Why have we not concessioned, partially privatize or sold them off? .

Why are we still spending billions of dollars annually importing and subsidizing the Pms imports, even when less blessed and endowed neigbouring countries like Liberia have since liberalized and opened up their down stream Oil And Gas industry? Why and many whys ?

Dr Nnaemeka Onyeka Obiaraeri , FICA

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