Subsidy payment drains scarce resources, officials say
The House of Representatives on Thursday described the under-collection of payments by the Nigerian National Petroleum Corporation to subsidize Premium Motor Spirit (gasoline) as a major drain on the country’s scarce resources.
House of Representatives finance committee chairman Abiodun Faleke said this at the end of his 10-day panel with heads of federal ministries, departments and agencies on the 2022-2024 medium-term spending framework and the budget strategy document.
Data released by the Federal Ministry of Finance this year showed that claims for under-collection or subsidies deducted from oil revenues by the NNPC amounted to 25.37 billion naira in February, 60.396 billion naira in March and 61.966 billion naira in April.
Data revealed that the subsidy increased to 126.298 billion naira in May but was reduced to 114 billion naira in June 2021.
Faleke stressed the need to improve the economy’s fiscal performance by establishing data that would detail daily gasoline consumption in Nigeria.
He said: “There is an urgent need to establish the actual daily consumption of PMS in the country, as the data from relevant stakeholders in the downstream sector has been shown to be contradictory.
“It should also be noted that the current PMS under recovery payments is a major drain on the country’s scarce resources. ”
He expressed optimism, however, that with the signing of the Oil Industry Law, this would soon end.
He lamented that federal agencies have “taken advantage of their establishment laws to spend their internally generated revenues, thus depriving the government of necessary revenues.”
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