…Says Subsidy Removal Increased Revenue and Funding of Critical Infrastructure
The Northern Youth Groups (NYG) has commended Bayo Ojulari, group chief executive officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL), for ensuring transparency and accountability in the discharge of his duties.
In a statement issued on Tuesday by Alhaji Abubakar Ibrahim, the National President of NYG, and Comrade Abutu Ainoko, the National Secretary, the group said the N7.13 trillion recorded as energy security expenditure in NNPCL’s audited financial statements should be properly understood within the context of the company’s obligations to maintain energy stability.
The group also said the removal of the petrol subsidy by President Bola Tinubu, had created opportunities for government to redirect resources towards critical infrastructure, job creation and other areas capable of strengthening the economy.
NYG said the NNPCL audit report provided explanations on the energy security expenditure, including costs associated with the company’s role as an energy supplier of last resort and the effect of exchange-rate differentials on petroleum supply.
“We commend the leadership of NNPCL under Bayo Ojulari for demonstrating transparency and accountability in the discharge of his duties.
The publication of the audited financial statements provides Nigerians and stakeholders with the opportunity to understand the circumstances surrounding the energy security expenditure and to subject the figures to proper scrutiny,” the statement said.
The organisation said the Petroleum Industry Act (PIA) provides a framework for NNPCL to incur costs as an energy supplier of last resort for energy security reasons, with such costs to be borne by the federation.
According to the group, the report’s explanation that the energy security expense arose partly from the difference between the exchange rate used in determining the PMS ex-coastal price and the prevailing rate at the point of import settlement offered important context to the expenditure.
“Every expenditure involving public resources must be open to scrutiny.
However, such scrutiny must be based on the complete facts and the applicable legal framework.
The audit report provides explanations on under-recovery, exchange-rate differentials and other costs incurred by NNPCL in the course of maintaining energy security,” NYG said.
The group said the debate over energy security expenditure should also take into account the financial burden previously associated with petrol subsidy payments and the government’s decision to remove the subsidy.
NYG argued that the removal of the subsidy had reduced the pressure of financing petrol consumption from public funds and created additional resources that could be deployed to productive sectors.
“The removal of the fuel subsidy has not been without hardship.
However, it is equally important to acknowledge the economic opportunities created by the reform.
Resources that were previously committed to subsidising petroleum consumption can now be channelled into critical infrastructure, job creation and other investments that can expand economic activity,” the group said.
According to NYG, the growth of these sectors could generate employment, strengthen local businesses and reduce the country’s dependence on imported petroleum products.
“The long-term success of subsidy removal will ultimately depend on how responsibly the resulting revenues and savings are utilised.
Nigerians must be able to see the benefits through better roads, healthcare, education, security, energy infrastructure and other projects that improve living standards and stimulate economic growth,” the statement said.
The group urged the federal government to maintain transparency in the management and deployment of resources generated from the petroleum-sector reforms.
It also called for continued scrutiny of NNPCL’s financial activities through appropriate regulatory and accountability mechanisms, saying legitimate questions about public expenditure should be answered with facts and documentation.
NYG said Ojulari and the NNPCL management should be encouraged to sustain the culture of transparency while ensuring that the company’s operations support Nigeria’s broader economic and energy-security objectives.
