Nigeria’s fuel subsidy bill hit a staggering N1.16 trillion in 2021, as the Senate’s ongoing investigation into the oil and gas sector uncovered major deductions from the country’s crude oil revenues. The revelation emerged during a hearing of the Senate Public Accounts Committee (SPAC), which is examining Nigeria Extractive Industries Transparency Initiative (NEITI) audit reports covering the 2021–2023 fiscal years.
Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Dr. Mohammed Bello Shehu, told lawmakers that another N1.20 trillion was deducted from proceeds of federation crude oil sales during the period. He also disclosed that N16.20 billion was spent on crude oil and petroleum product losses, N22.05 billion on pipeline repairs, while N6.75 billion was deducted for strategic stock holding.
Shehu also raised concerns about how Nigeria calculates the constitutional 13 per cent derivation paid to oil-producing states. He argued that deducting subsidy costs and other charges before calculating the derivation reduces the amount available to beneficiary states and does not reflect the original intention of the constitutional provision. According to him, the derivation should not be calculated from a revenue balance created after several deductions.
The hearing took another dramatic turn when the Auditor-General of the Federation failed to appear before the committee and did not send a representative. Committee Chairman Senator Ibrahim Dankwabo expressed strong displeasure over the absence and warned that lawmakers could use their constitutional powers to compel the Auditor-General to attend the next hearing if he fails to honour the invitation.
The Senate’s probe is now set to intensify as lawmakers continue examining Nigeria’s oil revenues, subsidy payments, crude oil deductions and remittances contained in the NEITI audit reports. With more figures expected to come under scrutiny, the investigation could put renewed focus on how billions of naira generated from the country’s oil sector are calculated, deducted and ultimately shared among the federal, state and local governments.
source: The guardian
