BREAKING NEWS, Oil & Gas
–
The Nigeria Extractive Industries Transparency Initiative says that time has come for the federal government to remove the fuel subsidy
| By Anayo Ezugwu | Jul 6, 2015 @ 01:00 GMT |
IF there is anything the Nigeria Extractive Industries Transparency Initiative, NEITI, wants the new administration of President Muhammadu Buhari to do without delay, it is removal of fuel subsidy. NEITI reiterated its position on the issue last week, saying that the federal government’s continuous application of scarce funds to subsidise domestic consumption of petrol is not sustainable. Zainab Ahmed, executive secretary, NEITI, who restated NEITI’s position during the recent visit of Clare Short, international chairperson of the Extractive Industries Transparency Initiative, EITI, in Abuja, noted that the time for the federal government to remove oil subsidy has come.
Citing the last NEITI audit report of 2012, Ahmed said a total of N1.355 trillion was processed for payment as subsidy but that N690 billion was actually paid out, thus inflicting a debt burden of N665 billion on the federal government. She explained that NEITI’s position remains that the amount of funds so far expended on petrol subsidy is more than enough to repair Nigeria’s four refineries in Port Harcourt, Warri and Kaduna or even build new ones.
“From our reports, the amount of money that Nigeria has paid so far on subsidy in the last seven years stand at N4.5 trillion.” The breakdown shows that N816.554 billion was paid between 2006 to 2008, N3 trillion between 2009 and 2011 and N690 billion in 2012. We in NEITI believe that this amount is more than enough to repair our refineries or build new ones. NEITI therefore stands firmly with Nigerians who share the fair position that the oil subsidy should be removed,” she said.
NEITI had in its 2012 audit report which was released in March this year stated that out of the 46 marketers given approval to import petrol in 2012 into the country, a few of the companies had performed below average while four of them did not import any petroleum products at all.
It thus recommended that the four marketers should be appropriately penalised and blacklisted from future participation in the import process if it is confirmed that they received foreign exchange for product importation without supplying products. NEITI also requested that the Petroleum Products Pricing Regulatory Agency, PPPRA, should review the future participation of the companies that performed poorly, adding that the post-payment audit system should be adjusted to ensure that vetting by independent auditor is carried out before payment.
“There is also the need for increased coordination of all the activities of government agencies involved in the subsidy process. PPPRA should ensure strict adherence to the rules in the subsidy determination process and appropriate penalties for breaches should be enforced.
“After the 2012 fuel subsidy probe by the National Assembly, the PPPRA management appears to have put together some reform policy initiatives to strengthen the process of petroleum product importation and also ensure a sanitised system. The initiatives should be fine-tuned and information need to be timely shared between all the agencies involved in subsidy determination including the Nigerian National Petroleum Corporation, NNPC,” NEITI explained in its audit report.
Agreeing with NEITI, the Lagos Chamber of Commerce and Industry, LCCI, has said that it’s in full support of the federal government to remove fuel subsidy. Muda Yusuf, director general, LCCI, said fuel subsidy failed to benefit ordinary Nigerians over the years. “The biggest hole in the finances of government in the country today is related to subsidy payments. There are two components of this. The first is the actual subsidy, which is the differential between the pump price and the landing and other costs of fuel. The second (and more disturbing component) is the corruption inherent in the fuel subsidy regime.
“For several years, the economy suffered severe bleeding from this phenomenon. Although it is not clear whether there has been any policy pronouncement on whether or not to retain the subsidy regime, the truth is that it is not sustainable. It is in the overall interest of the economy and citizens for it to be discontinued,” he said.
|
Tags: Clare Short EITI Extractive Industries Transparency Initiative Lagos Chamber of Commerce and Industry LCCI Muda Yusuf National Assembly NEITI Nigeria Extractive Industries Transparency Initiative Nigerian National Petroleum Corporation NNPC Petroleum Products Pricing Regulatory Agency PPPRA President Muhammadu Buhari Zainab Ahmed
