Senate says 'NO' to fuel subsidy removal
The Senate on Thursday rejected the recommendation by its Committee on Finance that the Federal Government should remove the subsidy on petroleum products.
The Senate Committee on Finance submitted its report on the allegation made by the former Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, on the non-remittance of oil revenue to the Federation Account by the Nigerian National Petroleum Corporation (NNPC), the Senate in May.
Sanusi, who is now Emir of Kano, as a sitting CBN governor made highly combustible allegations against the Nigeria National Petroleum Corporation, alleging that $49.8 billion had been siphoned away.
The committee was mandated to probe of Sanusi's allegation, which was contained in a letter he wrote to President Goodluck Jonathan in September last year.
The committee , had submitted that neither $49.8 billion nor $20 billion was missing as alleged by Sanusi who is now the Emir of Kano.
According to the report, which was submitted on May 28 by the committee chairman, Senator Ahmed Makarfi, the committee said it could not reconcile how the former CBN governor came about the non-remittance of $49.8 billion to the Federation Account.
Senators, while debating the report, slammed Sanusi's decision to make allegations before verifying the facts but also faulted NNPC's decision to spend money on subsidy without appropriation, describing it as a breach of the constitution, which they said was unacceptable.
They also condemned what they described as the disharmony, distrust and lack of coordination among the Ministries of Finance and Petroleum Resources as well as NNPC and CBN.
While some of the senators supported the recommendation for the removal of fuel subsidy, others opposed it, saying the fuel subsidy was the only benefit accruable to ordinary citizens.
Instead, they said the government should ensure adequate punishment for those defrauding the nation under the guise of the fuel subsidy regime, even as they lamented that a number of cases against subsidy fraud seemed to have been abandoned in the court.
When the matter was eventually put to vote, the recommendation for subsidy withdrawal was thrown out.
The Senate also took a share of the controversy surrounding the alleged unremitted funds, saying it was regrettable that the legislature was unaware of the financial crises in government institutions until Sanusi raised the allegation.
“This report has exposed not only the executive, but also the legislature. All those times, the legislature went to sleep and public servants became a law unto themselves, spending money without appropriation.
“That speaks a lot about us. Because of what has happened, Mr. President must take the necessary action; all of us here are privileged, but most Nigerians are not.
“It is high time we do not play politics with this report. We need to stand on authority that we can't take this any longer,” Senator Ahmed Lawan (Yobe North) said.
Senator Ayogu Eze (Enugu North), in his contribution, accused various government institutions of working at cross purposes.
He also berated the former CBN boss of exalting the institution above the government which appointed him and blamed the trend on a breakdown of communication among the relevant agencies.
He supported the removal of subsidy along with Senator Heinekken Lokpobiri (Bayelsa West).
But Senators Adegbenga Kaka (Ogun East), Smart Adeyemi (Kogi West) and Abdul Ningi (Bauchi Central), dismissed calls for fuel subsidy removal and tasked Jonathan to find out among his appointees and workers who engaged in unconstitutional spending with a view to ensuring that they are adequately punished.
Kaka said since some amount of money was recommended for refund, it might not be totally right to say that no amount of money was unaccounted for.
The senators also said it was regrettable that Nigeria had failed to put in place effective refineries, resulting in the importation of petrol after exporting crude oil, as they resolved that henceforth, no unappropriated funds should be spent on the fuel subsidy.
They also warned PPPRA to stop certifying subsidy payments if they are not appropriated.
The Senate also mandated the finance committee to follow up and obtain the forensic audit report from the Auditor-General of the Federation once the audit has been concluded and report back to the Senate.
The President of the Senate in remarks on the position of the Senate said, “If subsidy has to be removed, there must be public enlightenment and education so that facts would be made available to the people and then public opinion at the end of the day will count.
“If we sit here now and said remove subsidy, I think those who are benefitting from subsidy are very powerful and tomorrow they would influence media report and twist it to create an impression that the Senate is anti-people.”
The finance committee had recommended the removal of subsidy on fuel because of the alleged misapplication of the billions of dollars being voted annually for that purpose.
The Senate rejected the recommendation while adopting the report of the Senator Ahmed Makarfi-led committee.
The senators however approved the committee's recommendation that the Nigerian National Petroleum Corporation should refund to the Federation Account, the total sum of $218,069,354.32, being the balance of the gross lifting under the third party financing.
They also directed that inter-agencies reconciliation meetings between government institutions, including the Ministry of Finance, NNPC, CBN and the Federal Inland Revenue Service should be done on a regular basis.
It said such regular meetings among those sensitive economic institutions would prevent a recurrence of the situation and ensure that all revenues were properly and legally accounted for.
The Senate rejected the committee proposal to accept the N813.8bn subsidy deductions by the NNPC from January 2012 to July 2013, since it was certified by the Petroleum Products Pricing and Regulatory Agency and appropriated by the National Assembly.
It however accepted the subsidy deducted by the NNPC in the sum of N180bn for the fourth quarter of 2011, which was also certified by the PPPRA and appropriated by the National Assembly.
It advised the NNPC not pay its operational expenditures directly from the Federation Fund without appropriation by the National Assembly, saying the government oil corporation should strictly adhere to international best practises in keeping records.
The report also said the total kerosene subsidy paid by NNPC, but not appropriated for by the National Assembly between 2012 and 2013 was $4.430 billion, adding, however, that the amount might exceed this figure because the certification by the Petroleum Products Pricing Regulatory Agency (PPPRA) for the period was on an interim basis.
On the expenditure incurred by the corporation on subsidy which was not captured by the Appropriation Act, the committee advised Jonathan to prepare and present to the National Assembly a supplementary budget “to cover the expenditure in the sum of N90.6 billion for PMS (premium motor spirit) subsidy 2012 and the sum of N685.910 billion for kerosene subsidy expended without appropriation by the National Assembly”.