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Femi Falana Raises Alarm Over N1.4Trillion As Subsidy Monthly

Popular human rights activist, Femi Falana (SAN), has asked Minister of State, Ministry of Petroleum Resources, Dr. Ibe Kachikwu, to provide information on its N1.4 trillion monthly subsidy bill.

Falana notified Kachikwu that he had seven days to respond, as stipulated by the Freedom of Information Act.

He also impressed on him, the resolve of President Muhammadu Buhari to promote accountability and transparency.

The senior lawyer cited three instances where the minister and the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, gave conflicting information on the nation’s fuel consumption rate and subsidy cost.

Falana said: “In December 2017, the Management of the Nigerian National Petroleum Corporation (NNPC) disclosed that the nation’s consumption rate of fuel was 28 million litres per day and that subsidy cost was N726 million per day, i.e. N261.4b per annum.


“But on March 5, 2018, the Group Managing Director of the NNPC, Dr. Maikanti Baru claimed that the figure had metamorphosed to 50 million litres per day and that NNPC had spent $5.8 billion (1.7 Trillion naira) on fuel importation in January and February 2018.

“Furthermore, at a public forum held in Abuja two weeks ago, you (Kachikwu) stated that the consumption rate of fuel has skyrocketed to 60 million and that the cost of subsidy is N1.4 trillion per month!”

He poked holes in claims that smuggling of imported fuel from Nigeria to neighbouring countries by some economic saboteurs caused Nigeria’s increasing consumption rate.

Falana said: “Assuming, without conceding, that the story of smuggling is true, the total volume of fuel consumed by Benin, Togo, Cameroon, Niger, Chad and Ghana is said to be less than 250,000 litres per day.

“You will agree with me that this does not explain the difference of 32 million litres per day between the consumption rate of imported fuel in December 2017 and March 2018.

“With respect to the alleged subsidy of fuel importation, you failed to disclose the amount realised from the sale of the 60 million litres at N145 per liter.

The lawyer accused the minister of “conveniently” failing to account for the sale of the 445,000 barrels of crude oil allocated to the NNPC daily by the Federal Government.

He said: “Honourable Minister, the convenient defense of smuggling as cheap justification for a gap of 32 million litres a day (at 145 naira per litre is 4.6 billion naira daily) is untenable given the billions of naira continually expended on Project Aquila Software by the Petroleum Equalisation Fund (PEF), a Parastatal under your watch in the Petroleum Ministry, to track every litre of petroleum product evacuated from the depots and sold at retail stations in the country.

“Since the Project Aquila Software has capability to identify the identity of owners and locations of all trucks loading petroleum products in Nigeria, why has your office and NNPC continued to blame smuggling for the drain of N4.6 billion daily on petroleum products?

“How many of the truck owners involved in the alleged smuggling have been arrested and arraigned in court since Aquila has the data base of all truck owners in the country?”

Falana said the doubtful explanations had compelled him to request for copies of at least six documents:

“Bill of Laden and DPR certified Cargo Discharged Certificates of the imported subsidised Petroleum Products into the country from December 2017-March 2018.

“Offshore Processing Agreements pertaining to the sale of the 445,000 barrels of crude oil per day plus any additional crude barrels approved for domestic consumption from December 2017 -March 2018.

“Volumes of domestic refined products by the nations’ local refineries against gross expenditure on refinery Turn Around Maintenance (TAM)/ Expended Budget in 2017.

“Gross amount of Forex differential or Forex subsidy (gap Between CBN rate and Special rate approved for fuel importation) from December 2017-March 2018.

“Amount expended by PEF on Project Aquila from inception aimed at tracking Petroleum Trucks nationwide to prevent smuggling of petroleum products.”