The Nigerian National Petroleum Corporation (NNPC) Thursday in Abuja denied the existence of an alleged $3.5bn subsidy slush fund for underhand payments of differentials in the pump price of petrol by the corporation.
In a presentation to the Senator Ahmad Lawal-led Senate Ad Hoc Committee saddled with the task of investigating the existence of the said fund, NNPC Group Managing Director, Dr. Maikanti Baru, explained that the assertion was totally different from the reality on ground.
According to the NNPC GMD, what is in operation is a $1.05 billion fuel support fund created by the corporation in response to an earlier call by the National Assembly at the peak of the fuel crisis that the NNPC put an end to the supply hiccups.
Dr. Baru stated that propelled by this noble national requirement, the corporation initiated the move to raise a revolving fund of $1.05billion sequestered from the NNPC dividends from the Nigerian Liquefied Natural Gas Limited, NLNG.
He emphasized that the NNPC had no hesitation in acceding to the legislators’ call, making it the sole importer and supplier of white products in the country.
Dr. Baru explained that from inception, the fund had been domiciled in the Central Bank of Nigeria, saying contrary to the assertion, at no time was it in the custody of the NNPC.
“For the avoidance of doubt let me restate that the fund had been jointly managed by the NNPC, the Central Bank of Nigeria (CBN), the Federal Ministry of Finance, the Petroleum Products Pricing Regulatory Agency (PPPRA), Office of the Accountant General of the Federation (OGF), the Department of Petroleum Resources (DPR) and the Petroleum Equalization Fund (PEF),” he said.
He also affirmed that NNPC did not independently spend a dime of the fund which he noted was primarily to ensure stability in the petroleum products supply in the country by providing enough volumes to augment the petrol yield from the Direct-Sale-Direct-Purchase (DSDP) crude for products exchange arrangement.
While stressing that the NNPC was fully aware that only the National Assembly has the statutory responsibility to appropriate on petroleum subsidy matters, the NNPC GMD explained that the fund was designed to take care of the under recovery arising from the extra volumes which the DSDP could not capture.
Dr. Baru called on the National Assembly to support the enthronement of enabling environment that would ease the participation of marketers in petroleum products importation, adding that it is not in the best interest of the corporation and the nation to maintain the prevailing NNPC’s monopoly in the subsector.
Senate Ad Hoc Committee Chairman, Sen. Lawal pledged the readiness of his committee to pursue the assignment to a logical conclusion, even as he commended the NNPC GMD for his elaborate presentation on the contentious issue.
Senator Lawal adjourned the session to next Tuesday.