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Fuel subsidy: Saraki seeks Senate’s probe


ABUJA—THE Senate is set to investigate the operation of the fuel subsidy with a view to determining whether it was still operating within the parameters of the law if the motion by Senator Abubakar Saraki scales through, just as it will also look at why the expenditure must be higher than the amount budgeted for the year 2011.

Senator Abubakar Saraki, Kwara Central in a motion titled “A motion to investigate the current fuel subsidy management and consider the challenges it poses to the implementation of the 2011 budget.’’

The motion which was listed in yesterday’s notice paper noted that the Federal Government operates a fuel subsidy with the purpose of making petroleum products available and cushion the effect of the true market prices of petroleum products on the populace, adding that the fuel subsidy is a long-standing government palliative designed primarily to assist the Nigerian masses, just as he stressed that the motion does not in any way seek to remove fuel subsidy.

“Recognizing in the meantime, the need to make the scheme more transparent, corruption free and competitive within an appropriate legislative framework and in compliance with the Appropriation Act,’’ he said.

According to Saraki, for the implementation of the fuel subsidy, an amount is budgeted in the Appropriation Act and in 2011 N240billion (N20billion monthly) was allocated, adding that of the N20billion monthly allocated, N11.2billion was allocated for domestic fuel subsidy (NNPC) and N8.8billion for domestic fuel subsidy (market) as stated in the Appropriation Act 2011.

“Observe that although N20billion was set aside for subsidy on a monthly basis in the Appropriation Act 2011, in August 2011 the total figure expended was N165billion of which NNPC was N88billion and independent marketers was N77.7billion. Observe that although N240billion was budgeted for the entire year, so far as at August 2011 N931billion has been spent. This was a variance of N771billion or 700% above budget.

Fuel subsidy  management lacks transparency, control

“Worried that in the first three months of the year both NNPC and the independent marketers did not exceed N62billion monthly but within the last three months figures have ranged between N150billion and N186billion.

“Observe that with this trend year-end we will have a fuel subsidy bill of over Nl.2trillion as against the N240billion  budgeted in the Appropriation Act.

“Observe that this expenditure is treated as a first line charge and by implication all other expenditures include capital expenditures and even distributions to the states and local government, which we represent, is secondary.’’ The former governor of Kwara State and ex-Chairman, Nigeria Governors’ Forum, however, expressed fears that the implementation of 2011 Appropriation Act will surely be in troubled waters if a variation of Nl.2trillion arises as a result of the level of expenditure incurred on fuel subsidy so far”.

According to him, “the wide disparity between what was budgeted for fuel subsidy  and what is expended goes to the integrity of the budget and an erosion of the authority of the National Assembly. The processes, audit, scrutiny and value for money in the entire subsidy management system lacks transparency and control as the costs have continued to maintain an upward swing.’’

Senator Saraki who urged the Senate to set up a Special Committee to investigate and establish the structure of operations and financing of the fuel subsidy scheme, stressed that with this, it would then be established if there were cases bothering on misappropriation, misallocation and infractions.

“The National Assembly spends an enormous amount of energy to conclude a Capital budget of Nl.1tr (one trillion one hundred billion naira) for the entire country and a single agency of government can incur the same amount without due approval of the National Assembly poses a grave challenge and therefore an urgent need to review the subsidy scheme in order to strengthen the institutional integrity, transparency and accountability”.

“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.’’


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