Senate Probe Exposes N1.16tn Subsidy, Unpaid Levies By Oil Firms

By Jane Salihu

Fresh facts have emerged from the Senate’s ongoing probe of the oil and gas sector as the Revenue Mobilisation Allocation and Fiscal Commission said the Federal Government spent N1.16tn on fuel subsidy in 2021, while oil and gas companies failed to remit hundreds of millions of dollars and billions of naira in statutory levies to the Niger Delta Development Commission.

The disclosures were made on Thursday at an investigative hearing by the Senate Public Accounts Committee probing the 2021-2023 audit reports of the Nigeria Extractive Industries Transparency Initiative.

The Chairman of RMAFC, Dr Mohammed Bello Shehu, told the committee that apart from the N1.16tn subsidy payment, another N1.20tn was deducted from the Federation’s crude oil sales proceeds in 2021.

Shehu listed other deductions to include N16.20bn for crude oil and petroleum products losses, N22.05bn for pipeline repairs and N6.75bn for strategic stock holding.

He faulted the formula for computing the 13 per cent derivation fund for oil-producing states, saying the current practice negates the intent of the constitutional provision.

According to him, calculating the fund after deductions have been made from total revenue significantly reduces what accrues to the beneficiary states.

“The practice of computing the 13 per cent derivation on the balance of revenue after deductions from total collections is contrary to the intention of the derivation objective,” Shehu said.

In a separate presentation, the NDDC said oil and gas companies remitted a total of $6.755bn and N1.529tn to the commission as statutory contributions between 2021 and 2025.

The Executive Director, Corporate Services, Ifedayo Abegunde, who represented the Managing Director, Dr Samuel Ogbuku, said despite the remittances, the firms still owe the commission $290m and N163bn.

The remittances represent the mandatory three per cent levy payable by oil and gas companies for infrastructure development and environmental remediation in the Niger Delta.

However, the committee stepped down consideration of the NDDC report till next Wednesday to enable members to study the document.

The committee also frowned on the absence of the Auditor-General of the Federation at the hearing.

Its Chairman, Senator Ibrahim Dankwambo, described the action as unacceptable and warned that the National Assembly would invoke its constitutional powers if he failed to appear.

“The Auditor-General must unfailingly appear before this committee on Tuesday next week or risk the invocation of the powers of the National Assembly, which will lead to his forced appearance,” Dankwambo warned.

The probe is part of the Senate’s scrutiny of audit queries raised by the Office of the Auditor-General of the Federation on the management of the nation’s extractive industry between 2021 and 2023.