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NEC demands probe of NNPC's N1.5trn claim on subsidy, others

Wednesday, March 10, 2010
The National Economic Council (NEC) comprising the 36 state governors and relevant Federal Government functionaries rose from their meeting in Abuja yesterday presided over by Acting President Goodluck Jonathan, demanding a thorough auditing of the outstanding claim of N1.5 trillion on subsidy and other related expenditures put up by the Nigerian National Petroleum Corporation (NNPC).

Of the amount, a total sum of N880 billion is on subsidy said to be outstanding since 2005 which the governors said should be verified before any payment could be contemplated, describing the amount as outrageous in view of the inefficiencies that characterized the subsidy of petroleum products in the country.

Governors Gbenga Daniel and Emmanuel Uduaghan who briefed State House correspondents on the outcome of the meeting alongside the Minister of Finance, Dr. Mansur Muhtar and the CBN Governor, Mallam Sanusi Lamido spoke of the inevitability of the deregulation of the downstream sector of the oil industry, saying only a handful of people were actually the beneficiaries of the subsidy.

Governor Uduaghan said the states were concerned because they would be short-changed if the N880 billion subsidy was paid as the revenue accruing to the states would be badly affected since the money would come from the federation account.

'That is why the states are worried about this issue of paying money to some persons. And the people that get this money are very few in the society, so should we continue to enrich certain persons to the detriment of all of us,' he said, while justifying the proposed deregulation.

The states, he also said, were worried about the Joint Venture Cash Call (JVCC) in which money is deducted directly by the NNPC to their joint venture funds, pointing out that for about five months last year, the NNPC did not make any contribution to the federation account.

'We have said as economic council that a committee be put in place to look into this arrangement and see how to re-arrange the funding of the JVCC such that at least the state and federation account gets some funds,' he further stated.

Governor Daniel said the common people were not feeling the impact of government subsidy on petroleum products, hence the decision by the council that everything be done to huge waste and hasten up the deregulation policy.

Another major outcome of the NEC meeting was the setting up of a committee to handle the 50th independence anniversary celebration of the country across major centres with Abuja and Lagos hosting the key events.

The council decided that in spite of the ups and downs in our developmental strides, the anniversary should be marked in a grand style with the whole country involved in the celebration.

Other issues which came up for deliberation at the council's meeting included the country's revenue and how it would be distributed equitably as well as the support of the CBN for the real sector of the economy which Sanusi said was being taken seriously.