The NGF, which is the umbrella body for the 36 governors of the federation across party lines, made this known in a memo forwarded to the House of Representatives.

The memo is in response to the call for memoranda by the House’ Ad Hoc Committee on the Volume of Fuel Consumed Daily in Nigeria, which is investigating the actual amount of PMS the country consumes daily.

The memo, which was signed by the Head, Legislative Liaison, Peace and Security, NGF, Fatima Usman Katsina, for Chairman of the Forum, was titled ‘Findings on the Volume of Fuel Consumed Daily in Nigeria,’ dated July 1, 2022, and addressed to committee’s Chairman, Abdulkadir Abdullahi.

The governors referred the House to a November 2021 report by its National Executive Council’s ad hoc committee interfacing with the Nigeria National Petroleum Corporation on the appropriate pricing of PMS in Nigeria, which was chaired by Governor of Kaduna State, Nasir el-Rufai, and had governors of Edo, Jigawa, Ebonyi, Akwa Ibom and Ekiti, as well as the Governor of the Central Bank of Nigeria; Minister of Finance, Budget and National Planning; Accountant-General of the Federation, Group Managing Director of the NNPC and the Permanent Secretary, MBNP.

The memo partly read, “Although the operating environment has significantly worsened since the report was released, with NNPC now consistently reporting zero remittance to the Federation Accountant as profit from joint venture, production sharing contract and miscellaneous operations, the position of the forum remains generally the same.”

The NGF recalled how the report noted that the “federation (FAAC) net oil & gas revenues have been declining since 2019 and are projected to decline significantly in 2022 by between N3bn and up to N4.4bn unless action is taken now.” The memo read, “The following are some of the major findings relating to the volume of fuel consumed in the country:

“Remittances to the Federation Account Allocation Committee have continued to shrink as NNPC recovers shortfall quite arbitrarily from the Federation’s crude oil sales revenue. FAAC deductions for PMS subsidy are above 2019 levels, even without adjusting for reduced purchasing power of the naira due to inflation and FX rate deterioration.

“An analysis of the average monthly PMS consumption by states showed that a third of the country accounts for over 65 per cent consumption of PMS. The analysis showed that the following States of Lagos, Oyo, Ogun, Abuja, Delta, Kano, Kwara, Edo, Rivers, Kaduna, Kebbi and Adamawa accounted for 65 per cent of PMS consumption in the country. Most states with high PMS consumption either have borders with neighbouring countries or are in close proximity, this has been an avenue for smugglers to benefit from profitable arbitrage opportunities in PMS pricing.

“Households directly consume only about 25 per cent of the PMS that is consumed nationally, with the remaining three-quarters being consumed by firms, MDAs, transport operators or smuggled to neighbouring countries where the PMS price is nearly three times what it is in Nigeria; and of the PMS consumed by households, the richest 40 per cent of households account for over three-quarters of the PMS purchased by households, while the poorest 40 per cent of households purchased less than 3 per cent of all PMS sold in Nigeria.

“In the current fiscal regime, remittances to FAAC would continue to shrink as NNPC recovers this shortfall from the Federation as a result of crude oil price recovery. The report recommended a PMS pricing structure that addresses regional arbitrage and smuggling of PMS and provides additional revenue to the Federation Account. There is a significant market opportunity for additional export revenue streams for Nigeria to be had given the price parity with our neighbouring countries.

“Privatisation of the three government refineries as is, or after their full rehabilitation if affordable and viable, and expediting the licensing procedure for modular refineries will reduce the recurring government expenditure on refinery maintenance and increase the country’s refining capacity.”

The governors also noted that there were also economic risks highlighted in the report. “Fiscal pressures are threatening Nigeria’s recovery, as rising prices continue to push millions into poverty,” they stated.

This was disclosed in a statement released on Monday morning and signed by the NGF spokesman Abdulrazaque Bello-Barkindo.

According to the statement, the Governors forum said it was alarmed by the intensity of the second wave of the global pandemic and the country’s “tardy commencement of inoculation”.

Recall that in the past few weeks Nigeria has recorded an increase in the number of COVID-19 infection across the nation both in cases and fatalities.

As at Sunday night the Nigeria Centre for Disease Control reported 1,444 new cases and 15 deaths.

According to the statement, the NGF meeting will be the first for the Governors in 2021 and will be conducted virtually as usual since the pandemic started.

Part of the statement reads: “Alarmed by the intensity of the second wave of the Covid19 pandemic, and Nigeria’s tardy commencement of inoculation that is sweeping through countries globally, the 36 governors of the federation may finally come up with a definitive pronouncement, as they will be meeting on Wednesday January 20 to find the way forward for the country.

“The meeting which will be the first this year, 2021, by the governors, will as usual, be virtual, in conformity with the Covid19 protocols. It is the 23rd of the Nigeria Governors’ Forum teleconferences. The meeting commences at 2pm prompt but Governors are expected to start logging on from 1pm.

“The Governors’ PTF Committee, headed by Delta State Governor, Dr Ifeanyi Okowa, which is charged with the responsibility of liaising between the Presidential Task Force (PTF) on Covid19 and the Governors’ Forum, will brief the Forum on what it needs to know on the vaccines and the way forward.

“Governor Okowa is also expected to give a panoramic view of the second wave of the pandemic.

“The Chairman of the Forum, and Governor of Ekiti State, Dr John Kayode Fayemi will brief the Forum on his meeting with the President as well as update the Forum on all pending matters that have remained inconclusive, flowing from the previous year’s meetings.”