The Kerosine Subsidy... Subsidy generally.

Total gross revenues generated from crude-oil liftings irr the periood in question January 2012 to July 2013) were $69.34 billion and not $65 billion (as initially stated by the Governor of the Central Bank) or $67 billion (as stated by the Reconciliation Committee)

Total cash remitted to the Federation Account in the same period was S50.81 billion and not $47 billion (as stated by the Reconciliation Committee)

The Nigerian National Petroleum Corporation provided information to account for the difference not remitted, including deductions for various operation and maintenance costs, management costs, and deductions to pay itself for subsidies for petroleum motor spirits ($5.32 billion) and subsidies for dual-purpose kerosene ($3.38 billion)

These deductions were contestable and were noted by the audit report as such. They were the substance of the $10.8 billion to $12 billion unaccounted-for funds recorded by the Ministry of Finance. For example, the deductions for petroleum and kerosene subsidies ($8.70 billion) were contested by the Federation Accounts Allocation Committee and the Finance Ministry. They felt that transparency would be enhanced by having NNPC first pay the Federation Account all monies due and then submit a bill for subsidy expenses, which then would be verified before payment.

The kerosene subsidies were not budgeted for, which the Director General of the Budget Office and I had told the President at our prebudget discussions in 2012 and 2013. The reason was simple. The kerosene subsidy clearly did not benefit the majority of poor people targeted. Whereas kerosene was supposed to retail at N50 per liter (with a subsidy of N100 per liter paid by government), a survey conducted by the Finance Ministry in 2012 showed that retail prices across the country ranged from N97 to N200 per liter. Budgeting for a nonexistent subsidy therefore constituted in our minds a source of revenue leakage, so NNPC should not deduct any monies for a kerosene subsidy.