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Nigeria Senate probes state oil company over import subsidies

By AFP

Added 17th October 2018 08:34 AM

Nigeria, the world's seventh largest crude oil producer, imports processed oil products because local production is grossly inadequate.

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Nigeria, the world's seventh largest crude oil producer, imports processed oil products because local production is grossly inadequate.

The Nigerian Senate launched a probe Tuesday into spending by the state oil company of some $3.5 billion in import subsidies which was not approved by parliament, a statement said.

Nigeria, the world's seventh largest crude oil producer, imports processed oil products because local production is grossly inadequate.

These imports however are subsidised because the local price is usually well below the actual cost of the imported products.

The fuel subsidy scheme has been described as a sprawling web of patronage and mismanagement, a microcosm of the dysfunction in modern Nigeria.

There have been mounting allegations that the Nigerian National Petroleum Corporation (NNPC), which is solely responsible for these imports, has been spending money to subsidise the products without first seeking approval from parliament.

"Today, the Senate began an investigation into the 3.5 billion dollars spent under the ‘Subsidy Recovery Fund’ of the Nigerian National Petroleum Corporation (NNPC)," said a statement from the Senate president's office.

The motion to probe NNPC was moved by opposition leader in the senate, Biodun Olujimi who  charged that the SRF was in effect a slush fund.

Olujumi said in the statement that the SRF was managed by just two people.

"This fund is too huge for two people to manage, and right now, the 3.5 billion dollars is too huge to be managed without appropriation without recourse to any known law of the land," Olujumi said.

Senate President, Bukola Saraki, said the NNPC officials responsible should be summoned to give an explanation.

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