Senate says current petrol subsidy regime is illegal

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The Senate yesterday said the current payment of N26 per litre to subsidise Premium Motor Spirit (PMS) by the federal government was illegal as the monies were not appropriated for by the National Assembly as constitutionally required, THISDAY reports.

The matter of subsidy returned to the forefront of national discourse recently in the wake of the lingering fuel scarcity, as the Group Managing Director of the Nigeria National Petroleum Corporation (NNPC), Maikanti Baru, said six days ago that PMS was currently being subsidised with N26 per litre, due to government’s determination to retain the pump price at N145, despite the landing cost of N171. The Vice President, Yemi Osinbajo, briefing journalists in Lagos recently, also said the subsidy payments were being borne by the NNPC and not the federal government.

Several stakeholders noted that Osinbajo’s statement implied that the NNPC can spend monies without appropriation, despite being an agency of the federal government, or that the corporation is independent of the government. The Senate also weighed in yesterday when it declared that the said subsidy payments were not appropriated for, and are therefore illegal. The Chairman of the Senate Committee on Petroleum Resources (Downstream), Senator Kabiru Marafa, speaking at a news briefing yesterday said the Senate was determined to stop the payments which are illegal.