Yesterday, the finance minister, Okonjo Iweala honored the invitation of the [adhoc] committee. The committee quizzed her on the finance ministry's involvement in the oil subsidy process. In her exchanges with the committee, the minister made it clear that all monies made from crude oil through NNPC and partners – are not paid directly into the federal accounts of the nation. The minister stated that the monies for the oil subsidy are withdrawn before it gets to the national accounts – of which she accented by noting that it was unconstitutional for the NNPC to deduct any monies from Nigeria's crude oil revenues before payment into the national accounts.
However the Petroleum Resources Minister's appearance before the adhoc committee today discounts the finance minister's accession as untrue. The Minister pointed blame to the finance minister for the authorization of the N1.3trillion payment for oil subsidy. This she noted repeatedly while adding that the N1.3trillion may have been misleading to the Nigerian public.
The Petroleum Minister admitted under questioning from Hon Lawan Farouk that the N1.3trillion was not only paid for petrol subsidy – that the sum contained arrears for Kerosene and Petrol subsidy dating back to 2008 – thus giving the impression to the Nigerian public that the nation was disbursing disturbing amounts of money for the payment of petrol subsidy. She admitted also that only N250billion out of the N1.3trillion was paid for petrol subsidy.
The Petroleum Minister admitted that she does not know the total volume of petrol consumed in Nigeria. This is as she complained that Nigerian Federal Government was virtually subsidizing the entire ECOWAS community – as illegal transporters of petrol move subsidized petrol out from Nigeria to neighboring ECOWAS countries. But the federal petroleum minister was pinned on an embarrassing note – as it was pointed out to her that the Petroleum Ministry should know the total volume of petrol consume locally – that it would amount to a rudimentary embarrassment should the ministry not have the data.
The Petroleum Minister was not able to provide the total nominal capacity of the refineries in Nigeria. She indicated that information available to her showed that 12% of locally consumed petrol is refined in Nigeria – that Nigeria imports up to 90% of her petrol. She explained that Nigeria's refining capacity has increased to 60% from 30%.
It was learnt that operations at the Petroleum Ministry may have lost is focus starting from 2006. As gathered, the NNPC imported 92% of all the petrol used for local consumption in 2006 – at a much reduced cost – while private marketers [importers] were contracted to import about 8% of petrol. Today, it has flipped, virtually the entire locally consumed petrol is imported by independent marketers at an exorbitant cost. The Minister states that the independent marketers were introduced "to add competition".
"We have done nothing unconstitutional as a ministry" – exclaimed the Petroleum Ministry who spoke in a subdued demeanor as she managed to explain the huge disparity in the amounts of money paid to subsidize petrol in 2006 [when it was recorded that 27million liters of petrol was subsidized] and in 2011 [when it was recorded that 33million liters of petrol was subsidized]. In effect, N200billion in subsidy money was paid in 2006 for 27million liters of petrol while N1.3trillion was paid in 2011 for 33million liters.
In 2008 when the average crude oil price per barrel was $100 about 33million liters of petrol was subsidized at N630billion – similar to today's market conditions where the average price per barrel of crude oil is $100 – and about 33mllion liters of petrol was subsidized at N1.3trillion.