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States appalled as FG approves N3trn for subsidy; NGF, NLC query NNPC’s fidelity as Reps set to probe consumption figures

Shortly after announcing the decision to delay implementation of the Petroleum Industry Act, PIA, and retain payment of petrol subsidy for 18 months, Nigeria’s federal government yesterday approved N3 trillion for the new subsidy regime.

Shortly after announcing the decision to delay implementation of the Petroleum Industry Act, PIA, and retain payment of petrol subsidy for 18 months, Nigeria’s federal government yesterday approved N3 trillion for the new subsidy regime.

The Federal Executive Council, FEC, granted the approval at its weekly meeting in Abuja. The approval assigns an equivalent of 17.5 per cent of Nigeria’s 2022 budget (total budget is of N17.126 trillion) to fund subsidy payments – an amount that will obviously be financed through further borrowing.

The Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, disclosed this on Wednesday to State House Correspondents after the week’s virtual Federal Executive Council meeting at the Presidential Villa, Abuja.

According to Ahmed, only N443bn is currently available in the 2022 budget meant to cater for petrol subsidy from January to June.  

The minister stated, “We also presented to council today a request for council’s consideration to make additional funding provisions to enable us to meet incremental fuel subsidy request in the 2022 budget. You’ll recall that in the 2022 budget, as appropriated, we have made a provision of N443bn for a subsidy for January to June.

“The Nigerian National Petroleum Company has presented to the ministry a request for N3tn as fuel subsidy for 2022. What this means is that we have to make an incremental provision of N2.557tn to be able to meet the subsidy requirement, which is averaging about N270bn per month.”

In a swift reaction, the Nigeria Governors’ Forum and the Nigeria Labour Congress on Wednesday challenged the Nigerian National Petroleum Corporation over what they described as the mismanagement of the fuel subsidy regime.

The NGF and NLC are united in their conviction that the gap in the subsidy removal agenda was “hidden in the untruth bandied by the administrators of the subsidy.”

According to Bello-Barkindo, NLC’s head, public affairs, the Chairman of the NGF, Kayode Fayemi argued that it had become necessary for the two groups to verify NNPC’s estimates carefully.

“Fayemi told the labour leaders that subsidy removal had remained an ongoing conversation not just among governors but the country at large and emphasised that governors could not but be part of the solution providers in this onerous task that is confronting the nation.

“There are raging questions of accountability associated with subsidy removal in the country and observed that the NGF and the NLC can jointly work together to proffer solutions that heal the economy and provide succour to the Nigerian people.

“We need a partnership with the NLC to confront the challenges of what the NNPC is about… because there is a lot of fraud in the consumption and distribution figures that the country is getting and we can only move forward if the NLC engages all those who are knowledgeable in the field like PENGASSAN (Petroleum and Natural Gas Senior Staff Association of Nigeria) to conduct a thorough research into the sector before any further action is taken on subsidy.”

Similarly, the House of Representatives, Wednesday, said it would probe daily consumption of petrol and the state of the nation’s four refineries.

The House Speaker, Femi Gbajabiamila, stated that the facts must first be made available before the Federal Government takes decisions on the subsidy being paid on petroleum products.

The Speaker consequently set up two ad hoc committees to separately investigate the daily consumption of fuel and state of the refineries.

Gbajabiamila said, “It is going to be painstaking and it is going to be through. What exactly is the state of our refineries and what do we need to bring our refineries back to maximum use? Those two things have to be determined before we get to the issue of fuel subsidy. So, I will set up a very tight ad hoc committee of 12 members for each of those two (issues).”

On their part, the federating states seem to have exceeded their tolerance levels.

Delta State Commissioner for Finance Delta State, Fidelis Tilije, said state governments would not continue to tolerate the deduction of subsidy funds at the Federation Accounts Allocation Committee.

Tilije said, “Now, everybody is shouting subsidy.  Nobody is able to question exactly where these subsidies are being paid to. Who are the people consuming the fuel?

“The truth is that we are not able to ascertain whether we are paying the actual subsidy we are consuming. All we are doing now is that NNPC will just sit down and tell us this amount of subsidy we are going to pay next month and they will deduct the money.

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