FUEL SUBSIDY: SENATE PROBES NNPC, OIL MINISTER OVER N771BN ILLEGAL EXPENDITURE
Strong indications emerged on Wednesday that the Senate is set to commence a probe of illegal spending of unauthorized N771 billion on fuel subsidy in the last eight months of the fiscal year. The National Assembly and the Presidency allocated only N240 billion for fuel subsidy in 2011.
The proposed probe was consequent on a motion on notice sponsored by former Kwara State governor, Senator Bukola Saraki (PDP, Kwara Central). The motion seeks to investigate the current fuel subsidy management and consider the challenges it poses to the implementation of the 2011 budget.
Senator Saraki noted that the NNPC and the oil ministry breached the 2011 Appropriation Act by spending N931 billion on fuel subsidy between January and August 2011 with fears that the illegal spending would increase to N1 trillion before December 31, 2011.
The extra-budgetary spending was also in contravention of Section 80 of the 1999 Constitution.
A copy of the motion as published in the Senate on Wednesday Order Paper reads: 'In furtherance of the implementation of the fuel subsidy, an amount is budgeted in the Appropriation Act. In 2011, the sum of N240 billion (N20 billion monthly) was allocated.
'The N20 billion monthly allocated, N11.2 billion was allocated for Domestic Fuel Subsidy (NNPC) and N8.8 billion for Domestic Fuel Subsidy (Market) as stated in the 2011 Appropriation Act. Although the N20 billion was set aside for subsidy on a monthly basis in the Appropriation Act, 2011. In August 2011, the total figure expended was N165 billion of which NNPC was N88 billion and independent marketers was N77.7 billion.
'Although the N240 billion was budgeted for the entire year, so far, as at the end of August 2011, N931 billion has been spent. This is a variance of N771 billion or 700 per cent above budget. 'The Senate is worried that in the first three months of the year, both NNPC and independent marketers did not exceed N62 billion monthly but within the last three months, figures have ranged between N150 billion and N186 billion.
'With this trend, year-end, we will have a fuel subsidy bill of over N1.2 trillion as against N240 billion budgeted in the Appropriation Act.' In line with parliamentary practice, the Senate may debate the motion in plenary today.