Reps extend period dedicated to probing NNPC’s oil swap deal, insist N1.545tn spent on fuel subsidy in Q1 2022

Solomon Ezeme

The House of Representatives, Tuesday, have adopted a motion to extend the period of probe on fuel subsidy regime by an additional one year, as it seeks to know how about N1.545 trillion was expended by the old Nigerian National Petroleum Corporation (NNPC) during the period of new Direct Sales Direct Purchase (DSDP)/Swap Arrangement (January to June 2022), under the present President Muhammadu Buhari-led administration.

EnergyDay recalls that, in June 2022, the House constituted the Ad hoc Committee on Petroleum Products Subsidy Regime to investigate the subsidy regime in Nigeria, from 2013 to 2021. Honourable Benjamin Kalu, Chairman of the House Committee on Media and Public Affairs; and Ibrahim Al-Mustapha, Chairman of the Ad Hoc Committee, at a joint press conference in Abuja on June 31 2022, vowed to uncover the alleged frauds in the subsidy payment process undertaken by the NNPC, during the periods.

The House during the plenary session on Tuesday, following a motion moved by Rep. Abubakar Hassan Fulata, Chairman of the House Committee on Rules and Business, extend the periods to be investigated by one more year.

This according to the House pave addition time to properly investigate the newly introduced DSDP deal, particularly how the NNPC expended N1.545 trillion, out of N4 trillion approved by the Federal Government for fuel subsidy in 2022.

The Ad-hoc Committee on Petroleum Products Subsidy Regime was earlier constituted on 31 June 2002, with the mandate to investigate the Petroleum Products Subsidy Regime in Nigeria to cover only periods from 2013-2021. But now, the lawmakers extended the mandate of the committee to cover periods from 2013-2022.

Fulata’s motion titled: “Need for Extension of the Mandate of the Special Ad-hoc Committee to Investigate the Petroleum Products Subsidy Regime (Pursuant to Order One, Rule 1(2) of the Standing Orders of the House of Representatives”, which was unanimously adopted by the House will now see the Ad-hoc Committee probe the 1-year DSDP deal supervised by the old NNPC, as well as, all spending on fuel subsidy by the Corporation from 2013 to 2022.

“The House is concerned that the Committee’s mandate was restricted to the periods 2013-2021 whereas most of the industry players claimed that they are not part of the DSDP arrangement within the periods of the Committee’s mandate.

“It is disturbed that, between January to June 2022, the government has spent about 1.545 trillion naira on subsidies, a period some of these industry players are involved in the DSDP contract.

“Removing constraint that the Committee cannot extend the time to cover the periods outside its mandate, the House resolves to extend the mandate of the Ad-hoc Committee on Petroleum Products Subsidy Regime to cover the period of 2013 to 2022, as well as, Subsidy Payments and Forex Allocations from 2013 to date,” the lawmakers stated.

In May 2021 when the DSDP crude-for-fuel swap was reintroduced, the NNPC chose sixteen (16) consortia for one-year contracts, which took effect from August 2021, replacing earlier DSDP contracts from 2019 which were extended until mid-2021.

The consortia included Duke Oil, Trafigura, Vitol and Mercuria, Total, Sahara Energy, Oando, MRS Oil, amongst others.

The Government had ended previous crude oil swap deals in the country, in March 2016, before introducing what is known today as the “Direct Sale-Direct Purchase” arrangement, with the NNPC directly selling crude oil to refiners and purchasing refined oil products from them, in return.

Direct Sales Direct Purchase is a crude oil swap arrangement whereby crude oil is swapped for equivalent refined petroleum products.