Success Nwogu 
The Centre for Economic Policy Analysis and Research (CEPAR) has said that the N400 billion Nigerian National Petroleum Company Limited (NNPCL) said it had been spending monthly on the payment of subsidy on Premium Motor Spirit (PMS) was negatively impacting on Nigeria.
The centre said it was a big drain on Nigeria’s public finance.
CEPAR Director, Prof. Ndubisi Ifeanyi Nwokoma, in an interview with New Telegraph over the weekend, said the subsidy cost was affecting Nigeria’s borrowing level, adding that the figure of 65 million litres daily consumption of PMS was also suspect.
The Professor of Financial Economics of the Department of Economics of the University of Lagos cautioned that it was incumbent on the government to cut the cost of governance.
Nwokoma said: “Over the past period, people have been questioning the estimates used by the federal government, NNPCL and the Ministry of Finance in determining the estimate for the subsidy.
That is based on what some people consider as over-bloated figures for dealing with consumption. They estimate to be about 65 million litres per day.
“In my opinion that is over-bloated because, under the administration of President Goodluck Jonathan, it was about 34m litres per day and the economy was doing very well then compared to now because the real income was higher as inflation was single digit then.
“So people had a higher real income and a higher disposable income because the level of taxation then is lower than what is now.
“So if people then went with a higher real and disposal income could consume about 35 million or less than 40 million litres of fuel per day, how now that so many people do not have cars, as getting a car is expensive, and there are so many challenges in the economy, Nigerian consume 65 million litres of petrol per day?
“It is suspected that the estimated of 65m litres of petrol per day is overloaded. Some people, in some circles, feel that it is a way that the government siphons money.
“So that figure, in my opinion, is overloaded because it is based on the estimated level of PMS per day. So if they say N400bn, it is derived from the estimate of the consumption of PMS on a daily basis which is higher than what we expected. I think the figure being put up by NNPCL is suspect.
“The issue is how many litres do we really consume? If they are not all consumed in Nigeria, what plans have the government made to minimise smuggling to neighbouring countries? Those are the issues. It is like the cost that the ordinary man has to pay can be avoided. Such is one of the leakages which is within the control of the government. Definitely, the figures are suspects.”
He added: “The N400 billion is negatively impacting Nigeria. It affects our level of borrowing. It affects the nature of the country’s public finance because when you set aside such an amount of money
as a subsidy in the budget, you will not have much left to even attend to other economic priorities.
“That will definitely impact the country being able to sustain itself. So you keep borrowing more, borrow more as overdraft from the Central Bank, borrow more from the domestic market and borrow more externally. Definitely, it impacts negatively on development.
“It is very clear to virtually everybody, that the government needs to cut the cost of governance. That is a critical area. Unless that is done, we will keep on moving from frying pan to fire.
“Definitely, this government has not really done well in the area of cutting down the cost of governance and the figure that is being quoted like this N400 billion or estimate for subsidy is overloaded and there is a lot of leakages, padding here and there, and corruption being perpetuated through this official figure. “The government keep talking about cutting the cost of governance. If this is addressed, it will help us to come out of the problem gradually.
“Nigerians should have patience and hope that we will get a new leader that will be able to address the issues.
This current government, we should not expect much from them, apart from being able to do what they are doing such that we will have a credible election, make sure that they do not go back from this cashless policy, and make sure that the cash that has been stashed away as proceeds of corruption, proceeds of terrorism and proceeds of money laundering is not used to influence the vote and quickly make sure that the right person wins the election so that we can start afresh. If they can do that, Nigerians should be hopeful that the future will be better.”
Recall that NNPCL Group Chief Executive Officer, Mele Kyari, during the Final Cutover from Nigerian National Petroleum Corporation to NNPCL, had said the monthly subsidy bill was N400 billion, and that NNPCL was spending about N202 as subsidy per litre of petrol distributed in Nigeria and that about 65 million litres of PMS was pumped daily into Nigeria by NNPCL.
