There is Fuel Subsidy in the 2015 Budget – Senate



THE Senate Committee on Finance, has denied the allegations in the media that the Senate did not make provision for fuel subsidy in the 2015 budget, which was passed by the lawmakers on Tuesday, April 28. Senator Ahmed Makarfi, chairman of the chairman, said on Thursday, April 30, that it was not true no provision was made for fuel subsidy in the budget.

Makarfi said the sum of N100 billion was provided as subsidy for Premium Motor Spirit, while N43 billion was approved for Dual Purpose Kerosene for the 2015 fiscal period. “There is a provision for subsidy in the budget; people need to understand where to look for an issue. If you look at the main appropriation, there are so many cost components. You will not see cash call in the main appropriation and you will not see subsidy in the main appropriation. There are expenses in the main memoranda items that you are not going to see in the main appropriation. For you to see them, you have to go through the revenue profile. In this year’s budget, N100billion was provided for Premium Motor Spirit and N43billion for DPK,” he said.

According to Makarfi, the amount budgeted for this year might not be enough to subsidise local consumption of petroleum products, the law allowed for additional funding request whenever the need arose. This window, according to him, can be used by the incoming government. “If what I read that N156billion would be paid to marketers is correct, it means there is an under estimation already and this is part of the problem because if we under calculate in order not to give a true picture of our financial position, what happens in the system? We should calculate everything to the correct position as possible so that we can know our true financial position to help us address these issues. There is subsidy provision; it may not be adequate, but again, the constitution has made provisions where if there are inadequacies, they can be addressed.”

On how the high cost of recurrent expenditure could be reduced, the committee chairman said rather than cut recurrent, emphasis should be placed on how to improve revenue, particularly the non-oil components. Makarfi said reducing the recurrent expenditure, which has a huge chunk for salaries and pension costs, might result in the sacking of workers, which would be detrimental to the people.

He said out of the N2.6 trillion that was allocated for recurrent expenditure, the sum of N1.8 trillion would be used for the payment of salaries of civil servants, while N177 billion was allocated for overheads of government’s ministries, departments and agencies. The balance, according to him, will be used to settle the pension of retired civil servants. “Before we can reduce the cost of governance, there is a need for us to know the structure of the recurrent costs. The non-debt recurrent cost based in the budget, which we have just passed, amounted to N2.6tn; now, if you are going to cut recurrent cost, this is what you are going to look at. You have to look at how much can we cut from N2.6tn.

“For instance, N1.8tn of this amount is salaries; so, are you going to cut salaries to reduce recurrent costs? Overheads for all the Ministries, Departments and Agencies of government that get their money through appropriation only amount to N177bn out of the N2.6tn, with N1.8tn for salaries. The rest is pension. So, if you say you are going to cut recurrent costs, is it the salaries and pensions you are going to cut?”

Consumers Want 12.5 Percent Cut in Electricity Tariff

Tomi Akingbogun

THE newly established Nigerian Electricity Consumers Advocacy Network, NECAN, has said that its immediate priority was to ensure further 12.5 percent cut in electricity tariff charged on consumers, especially for huge consumers. The group said it was not comfortable with the yardstick employed by Nigerian Electricity Regulatory Commission, NERC, in drawing up the tariff.

It added that it will challenge the commission because its advocacy will be centred on finding solutions to issues that affect consumers in the Nigerian Electricity Supply Industry, NESI. Tomi Akingbogun, chairman of the group, in his reaction to the recent 50 percent average cut in tariff of non-residential consumers, said that such action resulted from organised consumer advocacies especially from the Manufacturers Association of Nigeria, MAN, and other consumer groups. “We had 84 to 94 percent increment with the Distribution companies (Discos) and we complained, they reduced it to 50 percent depending on the zone but that still leaves us with up to 12.5 percent which we think it is still high.”

The group said it is putting all legal process in place to get the network activated shortly. “With the formation of the advocacy network, we are opening the door to all members of the public to be heard. We are going to have offices se up with officials on ground. We assure you that we are not going to be NERC’s baby. We are going to represent the interest of the public making sure that voices of people at the rural areas are heard,” Akingbogun said.

NECAN said it was working on sensitising the public using all media platforms across the states to grow members and create awareness to adequate face electricity operators noting that it will ensure NERC sanctions Discos who fail to meter eligible consumers at specified period. Akingbogun also stated that the network would push for sanctions against discos who fail to meter customers within a given time frame, stressing that the period for metering should not be open ended.

“We are concerned about metering and we are going to make presentations to NERC to give a put a deadline for metering because if you leave open to supply or not supply meters and you still get income then you are encouraging them. If in a place they know that if you have meter you bill will be N3,000 and without it they bill you N10,000 every month then there is no incentive for them to provide the meters,” he noted.

— May 11, 2015 @ 01:00 GMT


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