Nigeria spent N1.16 trillion on fuel subsidy in 2021, the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Dr Mohammed Shehu, told the Senate Public Accounts Committee (SPAC) on Thursday in Abuja. The disclosure came during a session examining the 2021–2023 audit reports on the oil and gas sector conducted by the Nigeria Extractive Industries Transparency Initiative (NEITI).
Shehu said a further N1.20 trillion was deducted from federation crude sales proceeds during the period. Additional deductions included N16.20 billion for crude and product losses, N22.05 billion for pipeline repairs and N6.75 billion for strategic stock holding. He told the committee that the current method of computing the 13 per cent derivation allocation — applied to the balance of revenue after deductions from total collections — undermines the objective of the derivation principle.
“The practice of computing 13 per cent derivation on the balance of revenue after deductions from the total collections is contrary to the intention of the derivation objective,” Shehu said.
The committee, chaired by Senator Ibrahim Dankwambo (Gombe North), stood down the submission of the Niger Delta Development Commission (NDDC) to allow members time to study the report ahead of a reappearance scheduled for August 12.
Dankwambo expressed displeasure at the absence of the Auditor-General of the Federation, who failed to appear for the investigative session without a valid reason or representative. He warned that the Auditor-General must appear before the committee next Tuesday or face compulsory attendance through the invocation of the National Assembly’s powers.
“The Auditor-General must unfailingly appear before this committee on Tuesday next week or risk invocation of powers of the National Assembly against him, which will lead to forced appearance,” Dankwambo said.
The session underscores ongoing scrutiny of fiscal transparency in Nigeria’s oil and gas industry, where subsidy costs, deduction practices and derivation calculations have long been points of contention between federal authorities and oil-producing states. Lawmakers are pressing for clearer accounting of federation revenues and stricter compliance with constitutional revenue-sharing formulas.
