Senate on Medium Term Fiscal Framework

Channels Television  
Updated January 20, 2012

The addition of a whopping N155 billion to the 2012 budget proposal for the payment of petroleum subsidy in arrears, in addition to the N1.3 trillion spent as at September 2011 has raised questions from members of the House of Representatives committee investigating the subsidy regime, who are demanding valid justification for the exorbitant amount spent.

House of Reps

According to Sweet Crude Reports the ad-hoc committee on Subsidy Regime led by Farouk Lawan has asked finance minister Dr. Ngozi Okonjo Iweala to provide bank statements, details of crude oil extracted, volume of petrol consumed daily and relevant documents on the payment of subsidy from the Federal Ministry of Finance, as well as the unilateral withdrawal of revenues generated from the Joint Venture cash calls by Nigerian National Petroleum Corporation (NNPC) without recourse to the National Assembly.

Mr. Elias Mbam, Chairman of the Revenue Mobilisation and Fiscal Commission (RMFAC) revealed that there was no clear definition on which body was in charge of managing the subsidy, be it the NNPC, PPPRA, Minstry of Petroleum or Ministry of Finance.

Mbam revealed as much in a document presented during the investigation sitting.

Finance minister Dr. Okonjo-Iweala, during her presentation, denounced the corruption-infested administration of the subsidy regime and operations of revenue-generating agencies, Sweet Crude reported.

She ensured that President Goodluck Jonathan was setting the corrupt system to rights, approving the setup of a committee to ensure that all revenues generated will be remitted into the federation account.

Bright Okogu, Director General of the Budget Office explained that the N155 billion provided in the 2012 budget proposal will cover payments made to oil marketers as at December 2011.

Explaining why the subsidy payments for 2011 far outweighed the N245 billion budgeted for the year’s fiscal framework, Okogu said the budgeted amount was simply a notional figure since the Federal Government had no way of knowing “how much of subsidy you will need because it depends on international price of crude oil, exchange and other factors.”