The Nigerian National Petroleum Corporation (NNPC) on Tuesday denied having in its custody a $3.5 billion subsidy fund it is managing exclusively without appropriation by the National Assembly.
Instead, the NNPC says, $1.05 billion “revolving fund” used to ensure stability in fuel supply is domiciled with the Central Bank of Nigeria.
On Tuesday, senators had a heated debate at the plenary over a report by a colleague, Biodun Olujimi (Ekiti-PDP), alleging the NNPC had a secret $3.5 billion budget recovery fund it has been drawing from to offset the rising cost of subsidy of petroleum products supply in the country.
Despite the decision by the present administration to do away with the practice by previous governments to pay for the subsidy of petroleum products supply, critics say there still exists a high subsidy component in the fuel pricing template being managed by the NNPC.
There are insinuations that the subsidy in the current pricing structure, as a result of the difference between landing cost of imported products and the N145 per litre retail price approved by the government, was as high as almost N2 trillion per annum.
The lawmakers’ concern on the issue was that, contrary to the usual practice, since 1999, for a specific amount to be appropriated in the annual budget for subsidy recovery, the present administration jettisoned that arrangement, for a subsidy recovery fund.
Besides, the lawmakers said they were worried about the transparency of the arrangement, as only the Group Managing Director of NNPC, Maikanti Baru, and the chief financial officer in charge of Finance & Accounts, Isiaka Abdulrazaq, were managing the funds without appropriation.
“This fund is too huge for two people to manage. Right now, Mr President, the $3.5 billion is managed by just two and this is too huge to be managed without appropriation, without any recourse to any known law of the land,” Mrs Olujimi noted.
However, the NNPC, in a reaction through its spokesperson, Ndu Ughamadu, denied the existence of any $3.5 billion subsidy recovery fund it was alleged to be managing without appropriation.
Rather Mr Ughamadu said what was in existence was a $1.05 billion revolving fund, which was adopted by the NNPC as one of strategies to meet the directive by the National Assembly to find all ways possible to resolve the fuel supply crisis in the country late last year.