Policymakers in Nigeria will investigate $3.5 billion allegedly spent by the state oil company on petrol subsidies and expressed concern that the sum was not included in the national budget.
The amount was used by the Nigerian National Petroleum Corporation under a so-called Subsidy Recovery Fund managed only by the NNPC’s managing director, Maikanti Baru, and a senior finance official, according to Biodun Olujimi, the senator who brought up the motion on Tuesday.
“This fund is too huge for two people to manage,” she said during a plenary in the capital, Abuja, according to transcriptions posted on the Senate’s Twitter account after the motion was passed. “The $3.5bn is too huge to be managed without appropriation.”
The NNPC denied any wrongdoing and said it was not in the custody of a $3.5bn fund. A $1.05bn National Fuel Support Fund was established by the company less than a year ago “to ensure stability in the petroleum products supply”, spokesman Ndu Ughamadu said. The fund is jointly managed by the NNPC, the central bank and the finance ministry, among others, and the firm “did not independently spend a dime of the fund.”
It was not immediately clear over which period of time the money was allegedly spent, according to the senators. Nigeria used $1.3bn for petrol subsidies in the six months through June, said Renaissance Capital in a note sent to clients on Tuesday.
Despite being Africa’s top oil producer, Nigeria imports almost all the fuel it consumes since its refineries are in a decrepit state. The NNPC imports the bulk of the petrol and the pump price is capped by the government at 145 naira (Dh 1.46) a litre.
NNPC officials will be summoned by the senate committee on the downstream sector, upper house president Bukola Saraki said, and the committee will report back by next week.
The NNPC has often been criticised for its opaque management and inefficiency. In July, Nigeria’s House of Representatives, the parliament’s lower chamber, said it would investigate the company for not sending enough funds to the government.