End subsidy on all petroleum products, Reps tell FG

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Members House of Representatives

The House of Representatives has issued a call to the Federal Government, urging them to discontinue subsidies not only on Premium Motor Spirit (PMS) but also on all petroleum products.

This appeal comes as a response to the resurgence of long queues at various fuel stations across the country, following the recent increase in the pump price of petrol due to the removal of the subsidy on PMS.

According to Celebritytelegraph.com , the Nigerian National Petroleum Company Limited had earlier announced an adjustment in the pump price of petrol to align with market realities. Subsequently, numerous retail outlets adjusted their fuel prices accordingly, with new rates ranging between N600 and N800 in Lagos, Abuja, Ogun, and other parts of the country.

However, the House of Representatives has called upon the government to implement palliative measures and other strategies to alleviate the impact of the PMS subsidy removal on the Nigerian populace.

These recommendations were put forth by the House Ad Hoc Committee on the Need to Investigate the Petroleum Products Subsidy Regime in Nigeria. The committee’s report was considered by the lawmakers as a Committee of the Whole and subsequently adopted during the plenary session on Thursday.

The committee, chaired by Ibrahim Aliyu, presented the report after an 11-month period since the task was assigned to the panel.

One of the recommendations proposed by the committee is for the Federal Government to completely eliminate subsidies on all petroleum products. Additionally, the committee suggested that the government should promptly develop measures and provide palliatives to mitigate the impact of subsidy removal on Nigerians. As of this year, 2023, the committee proposed the procurement and implementation of Compressed Natural Gas buses as an alternative transportation system with lower fuel consumption, aiming to alleviate the burden for the public.

The panel emphasized the importance of introducing intermodal, regional, and national transport systems to facilitate the movement of people throughout the country, thereby easing mass transportation.

According to excerpts from the report, the committee suggested several measures and recommendations. One of the proposals was for the Nigeria Navy, in collaboration with other relevant agencies, to be responsible for physically assessing and documenting daily crude production and lifting, with the aim of ensuring transparency and accountability in the sector.

The committee also urged the Federal Government to work closely with the National Assembly to determine key areas of economic development where the additional revenue from the subsidy removal could be effectively utilized.

Furthermore, the report called for a thorough forensic audit by the Office of the Auditor General for the Federation to investigate whether the N413 billion borrowed from the Central Bank of Nigeria for subsidy payments had been refunded after the passage and assent of the 2015 budget. The findings of this audit would then be submitted to the House for further legislative action.

With the removal of subsidies, the committee recommended the suspension of all Direct Sales Direct Purchase (oil swap) contracts and emphasized the need for the Nigerian National Petroleum Corporation Limited (NNPCL) to adhere to the provisions of the Petroleum Industry Act (PIA) to safeguard the country’s interests in terms of production, lifting, and sales of crude oil.

Additionally, the report suggested equipping the Nigeria Customs Service and the Weight and Measures Department of the Federal Ministry of Industry, Trade, and Investment to accurately determine the daily crude oil lifting from the country, ensuring proper checks and balances.

The committee also proposed amending the Nigeria Extractive Industries Transparency Initiative Act, 2007, to align with global best practices.

Lastly, the report recommended that the responsibility of conducting a comprehensive investigation into defaulting oil companies and government agencies that did not meet the committee’s expectations be assigned to the National Assembly, particularly the House’s standing or ad hoc committees in the 10th Assembly. The objective of this investigation would be to ascertain their level of involvement and protect the nation’s wealth.

In response to concerns regarding subsidy payments for petroleum products, particularly Premium Motor Spirit (petrol), during the previous administration led by Major General (retired) Muhammadu Buhari, the House of Representatives took action. On June 29, 2022, the House passed a resolution to investigate these payments.

Speaker of the House, Femi Gbajabiamila, established a panel to conduct the investigation, focusing on the period from 2017 to 2021. The panel was tasked with reporting back to the House within eight weeks, after which further legislative action would be taken.

The decision to initiate the investigation was prompted by a motion titled “Need to Investigate the Petroleum Products Subsidy Regime in Nigeria from 2017 to 2021,” which was presented by Sergius Ogun, a member of the House. The motion received unanimous support from the lawmakers during the plenary session on Wednesday.

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