The Senate has initiated an investigation into the oil subsidy and under-recovery system implemented during President Muhammadu Buhari’s administration until its removal in 2023. The upper legislative chamber expressed its concern over the staggering N9.3 trillion spent on the subsidy regime from January 2021 to June 2023.
In addition to probing the subsidy program, the Senate is advocating for a living wage for workers to mitigate the impact of subsidy removal. Furthermore, the Senate is calling for the establishment of three functional refineries to enable local production and distribution of refined oil, aiming to reduce the pump price from N540 per liter to a range of N300 to N350 per liter.
These resolutions were made following a motion sponsored by Chiwuba Ndubueze titled “Need to Investigate the Controversial Huge Expenditure on Premium Motor Spirit (PMS) under the Subsidy/Under Recovery Regime by the Nigerian National Petroleum Company Limited (NNPCL).” Ndubueze commended President Bola Tinubu’s decision to withdraw the subsidy in May but emphasized the need for further investigation into the regime.
Ndubueze highlighted the significant expenses incurred by NNPCL in the subsidy/under-recovery process. While the federal government claimed N170 billion as under-recovery between 2006 and 2015, it spent a staggering N843.121 billion on under-recovery from January 2018 to January 2019. Most notably, records indicate that N9.3 trillion was expended on subsidy/under-recovery from January 2021 to June 2023.
Several senators expressed their concerns over the substantial expenses associated with the subsidy regime by NNPCL and supported the proposed actions outlined in the motion. Consequently, the Senate resolved that its standing committees on Petroleum (Downstream), Petroleum (Upstream), and Finance should conduct a comprehensive investigation into the controversies surrounding the subsidy and under-recovery system.
Furthermore, the Senate urged NNPCL, in collaboration with major international oil companies (IOCs) in Nigeria, to form consortiums and construct three refineries to stabilize the oil market and contribute to the nation’s overall economy.