There was confusion yesterday at the Senate as the federal government requested for increase in the fuel subsidy budget from N413 billion to N521 billion.
President Muhammadu Buhari had last week in the N465.6 billion supplementary budget proposal requested for approval of N413 billion as outstanding fuel subsidy payment to oil marketers, but after the committee’s observation, the Permanent Secretary, Federal Ministry of Petroleum, Mrs Jamila Suara, disclosed that the amount did not cover the last three months.
According to Suara, the projected subsidy claims for the last quarter of the year apart from the N413 billion already requested for, is N108 billion, totalling N521billion needed for fuel subsidy payment.
“We just called the attention of the Budget Office to the fact that the proposal for the last quarter had not really been captured because it was about N108 billion. When we started discussion on it, it was much earlier in the year, hence the tidying up was not completed,” she said.
Irked by the development, the committee led by its Chairman, Danjuma Goje (APC Gombe Central), lambasted the concerned agencies for lacking synergy in operations that have to do with petroleum records and other important statistics needed for action by government at any point in time.
He wondered why the petroleum ministry and the Nigeria National Petroleum Corporation, NNPC, would forward a carryover of subsidy bills from the 2014 fiscal year to join the ones from January to September 2015, leaving out three critical months of the year.
Senator Goje said the committee was disappointed to discover that the government was laying the foundation for another round of fuel scarcity by failing to budget for subsidy for the last quarter of the year, especially as Christmas draws near.
“We are concerned because we don’t want to see this kind of situation in the next four years again. We want to see that fuel scarcity is totally eliminated and fuel is available to all. But we are disappointed to hear that this subsidy is only from January to September. With Christmas coming, it will be unfortunate that after paying this money, we will come back and face this problem again,” Goje said.
Also speaking, Senator Adamu Aliero (APC Kebbi Central) said this was merely postponing another evil day, insisting that the October-December subsidy must be approved in the supplementary budget.
“We don’t want a situation where long queues will surface again. We don’t want temporary solutions. We want the subsidy to cover up to December. This is unacceptable. It must be corrected. We must find a way to approve it as we enter into this period of Christmas to New Year,” Aliero said.
Also, the Minister of Budget and National Planning, Mr. Udoma Udo Udoma, sought the leave of the committee to allow his ministry, as well as the Ministries of Petroleum Resources and Finance to meet for the purpose of including the additional N108 billion in the supplementary budget.
More so, the committee detected from what Sen. Albert Akpan (Akwa-Ibom) described as intelligent report, that the NNPC had hidden its own share of over N700 billion subsidy payment which they had deducted at source without appropriation.
To this end, the Senate panel approved the request of Suara that all fuel subsidy agencies of government including the Budget Office, Federal Ministry of Finance, Central Bank of Nigeria, CBN, and NNPC return to the drawing board and submit a comprehensive bill that covers the remaining months of the year.
“This government is about change; change from a sordid past; change is to totally eliminate queues from our filling stations; every person must play a role to effect positive changes in the economy,” Goje said.
In his remarks, Chairman, Committee on Banking, Insurance and Other Financial Institutions, Senator Rafiu Ibrahim, noted that there was no clear synergy between the ministries of budget and petroleum resources.
He asked whether the N413 billion figure earlier forwarded included the exchange rate differential and the accumulated interest being claimed by the importers or whether they are the agreed figures with them and their bankers.
Also, the Chairman, Committee on Petroleum Resources (Upstream), Senator Tayo Alasoadura, questioned details of the subsidy requests specifying exact payment due to each of the major oil marketers.
Earlier, the Director-General, Budget Office, Aliyu Gusau, explained that the supplementary budget became compelling in view of discoveries that the amount earlier budgeted for subsidy by the outgone administration of Goodluck Jonathan was insufficient to pay outstanding subsidy.
According to him, additional expenditure became compelling in view of outstanding deficit, adding that the continued dwindling oil price in the international market had further created a borrowing deficit which he said compelled the government to raise the existing borrowing in the 2015 budget from N882.1 billion to N2.103 trillion.
It would be recalled that the Minister of State for Petroleum Resources, Emmanual Ibe Kachikwu, confirmed that President Buhari has given approval for the payment of the outstanding subsidy claims of N413 billion for oil marketers. He revealed that a letter has
been forwarded to the National Assembly for their approval for onward payment of the claims.
He made the disclosure during his maiden engagement with top echelon of all the agencies in the ministry after the swearing-in ceremony of ministers at the State House in Abuja.
He noted that gas development and infrastructure would also take centre stage in order to mop up some of the stranded gas, adding that a lot of energy would be deployed to gas-to-power, gas-to-industry and gas for domestic use.
Kachikwu stated that the daily fuel consumption in the country is close to 35 million litres, pointing out that the crude direct sales and purchase initiative has saved over $200 million for the country.
He noted that the ministry and all its departments and agencies would also focus on putting control in place and introduce cost-cutting measures in order to increase the revenue stream of the federal government.