2011 fuel subsidy in excess of N2t – Reps

The Ad Hoc Committee of the House of Representatives probing the management of fuel subsidy has said from calculations, it is obvious the money expended on subsidy in 2011 will be in excess of N2 trillion.

The Chairman of the committee, Hon. Farouk Lawan, said this on Thursday at the continued sitting of the committee.

Government had put the spending on subsidy for 2011 at N1.3 trillion, whereas only a provision of N240 billion was made for it in the budget.

But the Governor of the Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi on Wednesday told the House it was N1.7 trillion.

However, on Thursday, after listening to some marketers who said they were yet to be paid their share of the subsidy fund for 2011, Lawan said: “Two days ago, the CBN governor was here and he gave a figure of N1.73 trillion as amount paid in 2011 so far.

“Since morning, I have been listening to the marketers that appeared before us and all of them have outstanding payments: N9 billion, N10 billion and we have about 100 of these companies that participated in the scheme in 2011.

“By the time all these figures come in, we will be talking of another N500 billion.

“Which means the figure for 2011 will ultimately exceed N2 trillion.

“If about N600 billion was spent in 2010, there was no justification for the quantum leap that was witnessed in 2011.”

A former Executive Secretary of the Petroleum Products Pricing Regulatory Agency, Goody Egbuji, however, attempted to defend the rise in the figure spent on subsidy when he appeared before the committee on Thursday.

Egbuji said it was because the funds for the previous 2010, like it is happening with that for 2011, had not been fully settled.

He said: “This was how the bills of 2010 were also not paid in 2010.

“They were paid in 2011.

“So, any payment not made as at end of December 2011 is regarded as paid in 2012.

“Those payments must have been deliveries for 2010.

“Mathematically, when volume is increasing, cost is increasing and you also have exchange rate increasing.”

Lagos lawyer and human rights activist, Femi Falana, said it had become obvious the country was subsidising fraud and incompetence.

Falana told the committee: “It has since been established that the government has been subsidising incompetence, corruption, mismanagement and inefficiency, which have characterised the importation of petroleum products by the so-called oil cartel.

“From available records the NNPC is the leading member of the cartel, having collected more than 50 per cent of the total fuel subsidy from 2006 to 2011.

“In fact, PPPRA has admitted that 59 per cent of the total subsidy amount was paid to NNPC while 41 per cent was made to other marketers.

“There is another outstanding N220 billion NNPC’s debt as subsidy on kerosene.

“When the debt of N220 billion is added to N1.76 trillion credited to the CBN governor, Nigeria might have spent not less than N2 trillion on fuel subsidy in 2011 alone.”