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Fuel subsidy: Intrigues trail probe motion

By Innocent Anaba
FOLLOWING the Federal Government’s plan to begin the withdrawal of fuel subsidy from next year, stakeholders have called for a probe of the handling of funds appropriated for fuel subsidies.

President Goodluck Jonathan on Wednesday forwarded to the Senate a 2012-2015 medium term Fiscal Framework, MTFF and 2012 Fiscal Strategy Paper, FSP, with plans to begin subsidy withdrawal, which will free up up about N1.2 trillion in savings, next year.

With divergent views trailing the plan, there calls to probe how past subsidies were spent.

Indeed, immediate past Governor of Kwara State, Dr. Bukola Saraki, recently initiated a motion in the Senate, seeking an investigation into the N240 billion budgeted in the 2011 Appropriate Act for fuel subsidy. It had been suggested in some quarters, that some powerful Nigerians were benefiting from the fuel subsidy and had been making efforts to ensure that the motion was killed.

Saraki, chairman of the Senate Committee on Environment and Ecology, representing Kwara Central Senatorial District, had acted pursuant to Sections 88 and 89 of the 1999 constitution, which empowers the National Assembly to probe any sector of the country’s economy, to ensure that corruption was exposed and waste of public funds checked.

Senator Saraki and David Mark, Senate President

The said motion, it was gathered, was presented to the Senate about four weeks ago, and had been listed for consideration severally but on each occasion, it was not even mentioned.

It was gathered that some highly placed interests, who make a kill from fuel subsidy may have initiated moves to ensure that the motion was not moved, through their acolytes in the National Assembly.

A source said that the motion was intended to ensure transparency and accountability in the management of petroleum subsidy. The government had insisted that the ordinary Nigerians were losing out in fuel subsidy while a privileged few smile to the banks with proceeds of the subsidy.

Though debates for fuel subsidy removal had been on for about six years and had attracted mixed reactions, the call for probe of the activities and operations of the Nigerian National Petroleum Corporation, NNPC, had been loudest, as many Nigerians have not cared to consider Federal Government’s explanation for the planned subsidy removal.

Top on the reasons Nigerians were opposed to subsidy removal include the fact that till date, nobody knows the exact amount the country earns from the sale of crude oil. Attempts to unravel this had been frustrated through manipulation.

Another reason for worry is that the country’s refineries have not worked in the last 10 years because some powerful forces do not want them to work and even when monies were released, same end up in the bank account of a few that have been benefiting from the subsidy.

Those benefitting from the from this, it was argued, knew the consequences of conducting a probe, and so have always opposed it.

From the 2011 budget, N240billion was to subsidise petroleum products, but analysts fear that actual expenditure could amount to N1.2 trillion by the end of year owing to corruption and other sharp practices.

It is believed that this was at the expense of other budgetary items, especially as the entire capital budget for the same year was N1.1 trillion.

The motion stated that N771billion is 700 per cent above the budgeted sum, contending that if the current rate of expenditure was allowed to continue, N1.2 trillion would have been spent by one agency of government by December, this year and exceed the total capital budget of N1.1 trillion for the 2011 fiscal year.

Senator Saraki had sought for the setting up of a committee to investigate how the funds were sourced, fearing that might have been misappropriated. He further expressed worry that the first three months of the year, both NNPC and Independent Marketers did not exceed N62billion monthly, but wondered why within the last three months, figures had ranged between N159 billon and N186 billion.

According to him, of the N20 billion monthly allocation, N11.2 billion was voted for domestic fuel subsidy (NNPC) and N8.8bn for domestic fuel subsidy (market).

Saraki observed that although N20 billion was set aside for subsidy on a monthly basis in the 2011 Appropriation Act, a total sum of N165 billion was expended in August, 2011 out of which NNPC got N88 billion and independent marketers N77.7 billion.

He also observed that although N240 billion was budgeted for the entire year, N931 billion had been spent as at August ending.

“With this trend, by year-end, we will have a fuel subsidy bill of over N1.2 trillion as against the N240 billion budgeted for the programme in the Appropriation Act,” Saraki said, adding “this expenditure is treated as a first line charge and by implication all other expenditures including capital expenditures and even distribution to the states and local government, which we represent, is secondary.”

He noted that “the processes, audit, scrutiny and value for money in the entire subsidy management system lack transparency and control as the costs have continued to maintain an upward swing.”

According to Saraki, “If nothing is done to address this situation urgently, we risk the non-implementation of the 2011 budget and the hopes of Nigerians that much can be achieved this year will be a mirage.”

A lot of Nigerians believe that the motion by Saraki raised some questions, including what our refineries were refining that makes the nation permanently hooked on fuel imports, why should a nation prefer to create jobs for foreign refiners when its own people are ravaged by unemployment at home? Why have local refineries failed to work and why have new ones failed to be built? Why have private refiners been frustrated and prevented from building refineries? Who are the beneficiaries of the subsidy fraud and why has successive governments failed to stem the rape? Who are these privileged vampires whose pockets the subsidy money ends up?

Following the issues Saraki raised, there has been no official response from the Ministry of Petroleum Resources, NNPC or Petroleum Equalisation Fund and Petroleum Products Pricing and Regulatory Agency, PPPRA.

Mr Adebolu Arowolo, an analyst was of the view that Saraki should be supported and encouraged to expose the tiny shadowy business class that has cornered the refined fuel supply system and sabotaged every effort at self-sufficiency in local refining.

He is of the view that until this class of people are uprooted and exposed, nothing will ever work in the country energy and power sectors.

“This tiny shadowy business class has cornered the refined fuel supply system and sabotaged every effort at self-sufficiency in local refining. They have pocketed the oil bureaucrats and rendered government apparatus ineffective for achieving the public purpose. Nobody should expect any sector of the economy to function in public interest if the powers behind the throne are still alive and kicking.

 


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