•Back President Tinubu on planned subsidy removal
The House of Representatives on Tuesday disclosed that there’s no provision for payment of fuel subsidy in the 2023 Appropriation Act implemented by the immediate past administration of President Muhammadu Buhari.
The House position, however, contradicts the position of the immediate past Minister of Finance, Budget and National Planning, Dr Zainab Ahmed who disclosed during the public presentation of the 2023 Appropriation Act in January 2023 that the sum of N3.36 trillion has been provided for a period of six months (January to June 2023).
The lawmakers’ position came to the fore during the debate on the motion of urgent Public Importance Order 8 Rule 4 sponsored by a member representing Lagos Mainland Federal Constituency of Lagos State, Hon. Jimoh Abdulraheem Olajide.
In his lead debate, Hon. Olajide said: “The House note that Mr President, Bola Ahmed Tinubu on May 29th 2023 made a public pronouncement on fuel subsidy removal.
“The House further notes that the President, Tinubu is a concerned senior citizen whose agenda is to favour the downtrodden for the purpose of humanity.
“The House is aware that there is no provision for fuel subsidy in the 2023 Appropriation Act.
“The House is further aware that the current 9th Assembly and the past Administration had given it legal backing.
“The House is convinced that further legislative actions in supporting Mr President in delivering dividends of democracy will go a long way in enhancing development because he asked for it, he campaigned for it!! And he is ready for the task ahead.
“The House is convinced that President Bola Ahmed Tinubu, the tutor-general of Nigerian politics is concerned about the masses and has the meaningful objective to utilise Nigeria funds appropriately with budgetary reforms agenda on education, health, infrastructure, agriculture, food, security and above all security of lives and property as embedded in the constitution,” Olajide said.
While applauding President Tinubu’s courage and boldness to serve our country Nigeria with honesty and integrity, the lawmakers congratulated him for his readiness for the national task ahead and his service to humanity.
To this end, the House appealed to Nigerians to remain patient, resilient and prayerful so that the President can deliver on his promises.
Recall that the Minister of Finance, Budget and National Planning, Dr Zainab Ahmed had during the presentation of the 2023-2027 Medium Term Expenditure Framework (MTEF) and Fiscal Policy Paper (FPP) to the House, observed that if the nation holds on to fuel subsidy as it is designed now, the country will be incurring from January to December subsidy cost of N6.4 trillion.
“So, if we did that then the cost will be N3.35 trillion which is half of the N6.7 trillion. FEC approved the second option, that’s the option that was conveyed by his excellency as the president to the National Assembly.
“But Let me also say that even though this is a reduced option, it would mean that we are borrowing more than we’ve borrowed, in 2022 we are carrying the cost of subsidy throughout the whole year. Recall that the initial MTEF and approval by the parliament was for us to exist a subsidy by June of this year.
“But during the course of the year, making an assessment of the difficult fiscal challenges in the economy and the hardship and high inflation and other challenges we were asked to resubmit our plans and review them to include provision for fuel subsidy throughout this year.
“That’s how we came back to parliament with an incremental expense from N443 billion which we had planned to up to N4 trillion subsidy expense in 2022.
“The situation is not desirable and it’s not sustainable, it’s putting the country in a very serious, dire, financial situation and we do hope that we will be able to exit this subsidy regime in the shortest possible time.
“The N3.35 trillion in the approved MTEF, that’s now before the National Assembly for consideration, could’ve been funding that will apply to other vital sectors of the economy such as health, and education. We are carrying a burden, that as citizens we have to access whether it’s beneficial for us to continue to do so.
“I want to move on to the document that has been circulated to the committee. In response to your letters to give information to the committee, for detailed information on petroleum subsidy in Nigeria for the period 2013, to 2022.
“Let me start by commending the National Assembly and this special committee in particular for undertaking this investigative hearing. The issue of subsidy is of great interest to this administration and of course the general public. Therefore, engagement with critical stakeholders such as this forum provides us with the opportunity to share information and provide clarification on this critical national issue.
“I’m going to address issues as highlighted by the lawmakers in the letters sent to us. Deduction of PMS under recovery shortfall by NNPC for the period 2013 to 2022 we are reporting that there’s a total sum of N4.436 trillion, which was deducted as PMS under-recovery by NNPC for the period January 2013 to December 2021. In the report, it shows the amount that were deducted from the period under review.
“Also in the report is the summary of subsidy that has been paid to independent oil marketers from 2013 to 2016 and in this report, we are reporting the sum of N1.774 trillion has been paid to independent oil marketers as PMS subsidy from 2013 to 2016.
“The total sum of N6.210 trillion was expended from PMS under-recovery by NNPC and payment to independent oil marketers from 2013 to 2021.
“On the funding of subsidy payments to independent oil marketers for 2013 to 2016, payments that have been made to them were directly from domestic excess crude account through the deduction of Sovereign Debts Instruments (SDI), They are negotiable short term instruments that were issued by the government at the time to enable marketers to access financial support from their banks for the importation of PMS.
“The instrument was approved by the then President in 2010. It is also important to note that we have instances where funds are transferred from the consolidated revenue fund to the domestic excess crude account for subsidy payments. For 2015, N31 billion, again the same year N106.1 billion was transferred from the CRF in another instance to the domestic excess crude account.
“In 2016 there was another transfer of N40 billion from the CRF to the same account for the purpose of settling PMS subsidy to oil marketers.
“There was also the sum of N413.363 billion which was provided through short-term funding by the Central Bank of Nigeria. The details by the President for the approval of this funding is also attached to the document submitted to the committee.
“With respect to the transfer of funds by NNPC and its affiliates to the treasury single account, the ministry has obtained evidence as enclosed in annex 9 of the report. The ministry is also not in the position to provide a statement of account of NNPC and its affiliates. The parliament should ask for this directly from them,” the Minister told House members.
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