The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has backed President Bola Tinubu’s decision to stop the subsidy on petrol products.
On May 29, Tinubu in his inaugural address said “subsidy can no longer justify its ever-increasing costs in the wake of drying resources”.
The President pledged his administration’s support to channel the money to provide basic infrastructural needs to Nigerians.
READ ALSO: CAN Accuses El-Rufai Of Playing Religious, Manipulative Politics
Reacting in a statement on Thursday, the RMAFC Chairman, Mohammed Shehu, said payment of “humongous” amounts to a privileged few in the name of subsidy was a major drain on the nation’s scarce resources.
He stated that the Nigerian National Petroleum Company Limited (NNPCL), one of the major sources of revenue to the Federation Account, had since stopped contributing to the national purse due to the fuel subsidy regime.
According to the RMAFC boss, the President’s pronouncement of the removal of fuel subsidy due to the non-budgetary provision for subsidy is a masterstroke that broke the jinx and the appropriate step in the right direction.
“It is saddening to note that since 1st January, 2022 to date, the Nigeria National Petroleum Company Limited (NNPCL) has not been contributing to the Federation Account due to the claimed subsidy payments,” the statement read.
“The country can no longer sustain fuel subsidies whose demerits far outweigh its benefits to the citizenry,” the statement read.
“The total amount withheld by the NNPCL as claimed subsidies for this period amounted to N8,480,204,553,608.13 as reported by the Office of the Accountant General of the Federation (OAGF) which is yet to be reconciled by the RMAFC, OAGF, and NNPCL.”
In a situation where the records of petrol subsidy transactions are not transparent and crude oil prices are being determined globally, Shehu stressed that it would be unwise to sustain “the phantom payments of subsidy at the detriment of other critical sectors of the economy”.
He equally emphasised that the cessation of under-recovery payments would eliminate the uncertainty surrounding the subsidy regime, adding that it would free up funds for the execution of critical national development and human capital enhancement projects.
He enumerated such projects to include the provision of an affordable transport system, investment in the education sector, improvement in health care, and infrastructural development.
