Nigeria: Subsidy – Why Release 98m Litres of PMs Instead of 60, Customs CG, Ali Queries NNPC

The Controller-General of the Nigeria Customs Service, Col Hameed Ali, retd, has queried why the Nigerian National Petroleum Corporation Limited, NNPCL, would allow the release of 98 million litres of petrol per day for local consumption, instead of 60 million litres admitted by its own computation.

He wondered where 38 million litres were always taken.

Ali, who couldn’t come to terms with the situation, spoke of the factors that led to smuggling and on the heels of the N11 trillion projected 2023 budget deficit which arose from the payment of fuel subsidy at the ongoing interactive session with the House of Representatives Committee on Finance on the consideration of the Meduim Term Expenditure Framework MTEF and Fiscal Strategy Paper FSP from 2023 to 2025. He also said the Service had so far generated N1.167 trillion from the targeted N2.272 trillion for 2022.

He said: “I remember that last year, we spoke about this but unfortunately, this year, we are talking about subsidy again. The over N11 trillion we are going to take as debt, more than half of it is going for subsidy.

“The issue is not about smuggling of petroleum products. I have always argued this with NNPC. If we are consuming 60 million litres per day by their own computation, why would you allow the release of 98 million litres per day?

“If you know this is our consumption, why would you allow that release? Scientifically, you cannot tell me that if I fill my tank today, tomorrow, I will fill the same tank with the same quantity of fuel. If I am operating a fuel station and I go to Minna depot, lift petrol and take it to Kaduna, I may get to Kaduna in the evening and offload that fuel.

“There is no way I would have sold off that petrol immediately to warrant another load. So, how did you get to 60 million litres per day? That is my problem. The issue of smuggling, if you release 98 million litre in actual, and 60 million litres is used, the balance should be 38 million litres.

“How many trucks will carry 38 million litres every day? Which road are they following and where are they carrying this thing to.

“The approved target for 2021 was N1.67 trillion and at the end of 2021, we were able to collect N1.715. For 2022, we have a target of N2.272 trillion. So far, by the end of July, we have collected N1.167 trillion.

“Our projection for 2023, 2024 and 2025, based on the parametres we have circulated, we hope and pray that we should be able to collect N2.87 trillion in 2024, we are expecting to collect N3.54 trillion and in 2025, we hope to be able to collect N3.752 trillion.

“Our account is with the Central Bank, the federations account is with the Central Bank. Throughout my life in this agency, I don’t think we have ever obtained any statement of account from the CBN. What we do is to reconcile collection, i.e what we have collected and what we have remitted. So, we don’t have a statement of account.

“They will only give us statement of account on the money they keep for us which is our seven per cent cost of collection.”

Speaking on the cost of collection and remittances, Ali said they live on the process of their own labour.

Adding that the Service was doing all it could to adequately police the borders to curb rice smuggling into the country.

“Nigeria Customs Service is the only organization today that has to fight to collect revenue. It is the only organization that loses its men in the course of collecting revenue and enforcing anti-smuggling provisions.

“It is the only organization that raises its funds on a regularly basis. As a result of this, the government agreed to give us seven per cent cost of collection. By my understanding, the cost of collection is paying for our own labour.

“That is what we live on, that is what we pay our salaries with and fund our capital projects. There is no other law anywhere that gives us subvention from government. That is our sole income.

“In 2017, from November to May 2018, it was this money that we used to pay our salaries. There is no law anywhere that says we can go to government if there is any short fall. If we didn’t have this money, there would have been riot in my house because these men will not work without pay.

“There is a law today that is being operated in breach. The Finance Act took all revenue generating activities and gave them to FIRS. If we had stopped collecting and left it to FIRS, there would have been chaos.

“We are doing well in the area of land borders. Our problem is in the marine area. We do not have adequate boats to patrol the waterways because that is where smugglers use in ferrying rice. We have been able to isolate some of the areas they are using.

“We are relating with the Navy to assist us in the high sea. We have also taken diplomatic angle because some of these rice come through Benin Republic”.

Deputy Chairman of the committee, Saidu Abdullahi, had earlier in his remarks, said the subsidy regime was draining the economy and underscored the need for all government systems to work in synergy to improve the economy.

“If there is anything that has constituted nuisance and has become a drain in the economy today, it is this issue of subsidy and as a government, we have not done well. We owe it to the people of this country to do what is right for this country.

“We are talking about over N6 trillion going for subsidy payment that almost doesn’t exist. You talk about 38 million litres which amount to about 500 trucks leaving our shores on daily basis. We have investment in NIGCOMSAT.

“Has there been anytime that our satellite capture images of trucks leaving our shores? I think it is very clear that what is required is the political will to put a halt to that.

“Considering the importance of the inter-dependence of these two arms of government, I think we should work together to put a halt to this. Posterity will be kind to us if we are able to proffer a lasting solution to this issue of subsidy because it is not sustainable.

“We talk about insecurity. This is the real cause of it. The money that is supposed to go into the provision of social amenities is going into private pockets. I think there is need to work together to put a halt to this,” chairman of the committee had said.

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