The Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Dr Mohammed Bello Shehu, stated on Thursday that Nigeria spent N1.16 trillion on petrol subsidy in 2021, while N1.20 trillion was deducted from the Federation’s crude oil sales proceeds.
Shehu made the disclosure while presenting the commission’s submission to the Senate Public Accounts Committee (SPAC), which is probing the 2021-2023 audit reports on the oil and gas industry conducted by the Nigeria Extractive Industries Transparency Initiative (NEITI).
According to him, aside from the N1.16 trillion spent on fuel subsidy, crude oil and petroleum product losses accounted for N16.20 billion, pipeline repairs gulped N22.05 billion, while strategic stockholding cost N6.75 billion.
The RMAFC chairman also told the committee that the objective of the 13 percent derivation principle was undermined by the method used in its computation during the period under review.
‘The practice of computing 13 percent derivation on the balance of revenue after deductions from the total collections is contrary to the intention of the derivation objective,’ he said.
Meanwhile, the committee heard that oil and gas companies remitted $6.755billion to the Niger Delta Development Commission (NDDC) between 2021 and 2025.
The naira component of the contribution by the companies for the same period stood at N1.529trillion.
The NDDC presented an updated report of the contributions of the companies up to 2025 even though the investigation period covered 2021 to 2023.
The money came from the 3 percent statutory contribution of the oil and gas companies to the NDDC to finance development and environmental intervention in the Niger Delta, whose oil and gas activities generate the companies’ revenues.
Under Section 14(2)(b) of the NDDC Act, as amended in 2017, the contribution is 3% of the total annual budget of an oil-producing company operating onshore or offshore in the Niger Delta and 3% of the total annual budget of a gas-processing company operating in the Niger Delta, excluding the cost of feed gas.
The Managing Director of the NDCC, Dr. Samuel Ogbuku, was represented at the hearing by a team led by the Executive Director, Corporate Services, Honourable Ifedayo Abegunde.
In a presentation to the committee, the NDDC team informed the Senate that the companies still owed $290million and N163billion as outstanding within the period under review.
However, lawmakers stood the report down to allow them to study it before the agency reappears next Wednesday.