Federation Account Allocation Committee recommends outright fuel subsidy with immediate effect contrary to federal government assurances that fuel subsidy removal was not on its card
| By Anayo Ezugwu | Apr. 28, 2014 @ 01:00 GMT
CONTRARY to the assurances of the federal government and the ministry of petroleum resources that fuel subsidy stay, the Federation Account Allocation Committee, FAAC, on Tuesday, April 15, adopted the recommendations of its ad hoc committee which recommended the outright removal of fuel subsidy with immediate effect.
Timothy Odaah, chairman of the States Finance Commissioners’ Forum, said the adoption of the recommendations implied that fuel subsidy deductions would not be provided for in the federation account. He explained that the states would thenceforth be paid directly whatever was due to them from the account and that the states would then be using the accruals to subsidise the needs of their people.
Odaah said the decision was informed by the fact that experiences about the fuel subsidy regime over the years showed that rather than benefitting the masses, the payments had largely been enjoyed by individuals who were involved in the management of the funds.
Meanwhile, the three tiers of government shared a total sum of N641.380 billion in March being statutory and other allocations from the federation account. A communiqué issued at the end of the FAAC meeting indicated that the gross revenue that accrued to the government in the month stood at N614.358 billion. The amount was lower than the N666.745 billion received in the preceding month.
A breakdown of the shared amount showed that the federal government got N249.084 billion from statutory distributions compared with the states and local governments’ N126.339 billion and N97.402 billion respectively. The oil producing states got additional N57.270 billion being the 13 percent derivation revenue earned from oil and gas sector operations.
Similarly, the three tiers of government also shared N60.775 billion earned from Value Added Tax, VAT, collections. The federal government received N9.116 billion being 15 percent of the distributions while the States got N30.388 billion or 50 percent compared with local governments’ N21.271 billion.
Other components shared by the three tiers of government were the N7.617 billion refunded by the Nigerian National Petroleum Corporation, NNPC and the SURE-P programme fund totalling N35.549 billion.
Speaking shortly after the meeting, Jonah Otunla, accountant- general of the federation, attributed the decline in revenue earnings primarily to production shut-ins at Qua Iboe Terminal, the shutdown of Forcados, oil theft and some repair works on pipeline leaks at Bonny and Brass Terminals.