THE joint Senate Committee investigating the operation of the fuel subsidy scheme, on Tuesday, rejected the position of the Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, on how the cost of fuel subsidy jumped from N245.96 billion to N1.34 trillion within three years.
The committee, which had its maiden sitting on Tuesday, could not accept the explanation of Alison-Madueke on who authorised the payment of N251 billion subsidy on kerosene when it was not budgeted for.
The minister told the committee that there was nothing wrong with fuel subsidy, but that the management of the subsidy had failed.
She, however, insisted that fuel subsidy must be removed, because the ordinary man did not enjoy derivable benefit.
Alison-Madueke also said fuel subsidy was only beneficial to the upper and the middle classes, who were privileged to drive around in multiple cars and convoys, as against the masses with no benefit, noting that “if removed, all Nigerians will see the benefit immediately.”
After her explanations, chairman of the committee, Senator Magnus Abe, asked that “the minister must return.”
Abe said “members are not satisfied with all your answers,” while advising her to devote time to study the trend of the work of the committee and return next week.”
HE probe of the alleged N1.3 trillion petroleum subsidy by the Senate panel yesterday started on a shaky note as the Committee was unable to extract much information from the Minister of Petroleum Resources, Mrs. Deziani Alison-Madueke and her Finance counterpart, Dr. Ngozi Okonjo-Iweala on the subject matter.
The Joint Committee on Petroleum Downstream, Finance and Appropriation mandated by the Senate to carry out the inquiry had invited some government officials in the petroleum sector, including the two ministers, with a view to extracting information on management of the subsidy.
The Senate, before the start of the probe, emphasised that the day’s affairs would be limited to the management of subsidy under the present administration while the issue of whether the fuel subsidy would remain or not, should be discussed on a separate date.
Victor Ndoma-Egba (SAN), who represented the Senate President David Mark, said the exercise was in line with the Senate’s mandate to curtail excesses and corruption. He also urged members to approach issues with patriotic zeal devoid of sentiments.
The Petroleum Minister was then asked to explain, among other things, the withdrawal of the extra amount without the consent of the Senate. In her response, she said the amount was paid out of operational cash flow of NNPC and as a result, a number of projects were dropped by the Corporation.
Since the original intention of fuel subsidy was defeated due to the activities of middlemen, the Senate demanded to know why, rather than remove subsidy, a reform be carried out on the entire fuel subsidy management.
Alison-Madueke also blamed the excess spending on continuous rise in the daily demand for petroleum products, high exchange rate over the years as well as increase in the cost of crude oil.
Not satisfied with the answers provided by the Minister, the Committee decided to give her time to prepare for the probe and come back at a later date.
“We are not satisfied with your answers and it appears you are not fully prepared for this. I think the committee will send you some of the questions so that you will come back on a future date”, the committee stated.
On this note, the Committee adjourned for a later date while the Minister of Finance also excused herself to attend an urgent matter. Both have agreed to come back whenever the Committee wanted.
But the Federal Government will spend not less than $2 billion to repair vandalised petroleum products pipelines in the next 12 months.
This was part of the disclosures by Alison-Madueke while briefing the House of Representatives’ Committee on Petroleum (Upstream Sector) at the National Assembly yesterday.
“The ministry is presently implementing the Real Time Pipeline System Surveillance Project, which is aimed at detecting, locating and quantifying pipeline leaks in real time and thereby preventing severe loss of lives and property in the event of pipeline rupture. The project is now 85 per cent completed for the gas system and 50 per cent completed for the liquid system,” the minister added.
She also informed the committee that the ministry would among other things try achieve maximum compliance with the gas flare-down policy of the Federal Government within the period.
The minister said that within the next 12 months, her ministry would ensure that the proposed deregulation of petroleum industry particularly at the downstream sector was actualized.
According to her, the ultimate aim of government was to ensure that gas takes over from oil in the next 30 months by developing gas to a level where it would take over as the mainstay of the nation’s export.
The minister listed the major challenges facing the petroleum industry as:
• Funding problems;
• Flare-down and flare penalty;
• Inadequate gas infrastructure;
• Pipeline integrity and vandalism;
• Multiplicity of regulators;
• Inadequate and obsolete petroleum laws;
• Ineffective implementation of expatriate quota guidelines; and
• Inadequate statutory provisions for sanctions.
In a remark, the chairman of the committee, Muraina Ajibola, declared that both the Legislature and the Executive must work harmoniously to achieve the stated goals of the ministry in the interest of Nigerians.
Courtesy: Tribune and Guardian newspapers (Nigeria)