Monday, 30 November 2015

Federal Govt raises supplementary budget proposal to N574 billion to provide for fuel subsidy

National Assembly
To adequately provide for fuel subsidy, the Federal Government’s 2015 supplementary budget proposal earlier submitted to the National Assembly may be increased from N465.69 billion to N574 billion.

The Minister of Budget and National Planning, Senator Udoma U. Udoma who led other ministers to a budget defence meeting with the Senate Appropriations Committee, admitted yesterday that a total sum of N108 billion meant for the payment of fuel subsidy to oil marketers for the months of October, November and December, was not captured in the N413 billion initially voted for subsidy claim.

And after exhaustive debate on the matter, the Ministries of Petroleum, Finance as well as Budget and National Planning agreed to submit an additional sum of N108 billion to the existing supplementary budget proposal to take care of the last quarter of 2015 subsidy claim.

But before the decision was taken to jerk up the 2015 supplementary proposal, the Senate panel members expressed disappointment over what they described as the deployment of half measures to fuel subsidy crises being adopted by the executive arm of government.
“I am surprised that what you submitted was the outstanding payment up till September only. We thought we are out to make a change. We do not want a temporary solution and we would not want your submission to stop by September.
“What plans do you have to forestall future occurrence because your submission appears to be a half measure,” chairman of the Appropriation Committee, Mohammed Danjuma Goje said.
He continued: “I express my complete dissatisfaction with the way you are treating the subsidy issue. It is obvious there is no synergy between the Budget Office and the Petroleum Ministry.
“Why is it that we have to live three months in a year without making provisions for the subsidy? What you are asking for has been expended because we have gone beyond September.
“Two months after, you did not come to tell us what you owed oil marketers. You just brought a figure and ask us to pass it. Even if we pass this because of exigency of the time, we will not accept it next time.”
The budget defence meeting, which was presided over by Goje, also accepted the plea by the ministers to be given few hours during which to review the budget figures to accommodate the additional N108 billion subsidy claim for the last quarter of 2015.

On the alleged extra budgetary spending by the Nigerian National Petroleum Corporation (NNPC), the committee expressed dismay over what it described as an attempt to create an opportunity for the corporation to continue to deduct its own subsidy claim from source without subjecting itself to appropriation.

It noted that whereas N413 billion was provided for the payment of subsidy claim to oil marketers, nothing was provided in the supplementary budget for the payment of subsidy claim to NNPC, a situation it observed would create a loophole to be exploited by the NNPC to source its subsidy claims from the money it generates.
The committee chairman stated: “I have an issue on subsidy. Intelligent report has shown that the outstanding subsidy as at September was about N700 billion and going by your presentation, you are presenting subsidy due to petroleum marketers as N413 billion. What is the subsidy due to NNPC?
It appears that the difference between this figure we got through an intelligent report and what you have submitted as due to major oil marketers is the one due to NNPC. So, can we say that the NNPC provision of 52 per cent of petroleum product is free because I know you earn subsidy as well and it is deducted at source. It is necessary we find out the amount of subsidy due to NNPC because it appears they are hiding something.”

In her explanation, the permanent secretary, Ministry of Petroleum, Jamila Shuara, however, said the figure of subsidy claim earlier presented was inherited on resumption a month ago.

But her explanation did not go down well with senators who reminded her of obvious lack of synergy between the Petroleum Ministry and the Budget Office.

In his submission, the Accountant General of the Federation, Alhaji Ahmed Idris, said only about N274.290 billion had so far been released.
He said: “We have in the 2015 Capital Budget, the sum of N557.378 billion out of which we made releases to agencies.
“First quarter, we released N112.039 billion, second quarter, N88.792 billion. There were also some capital supplementations amounting to N73.459 billion.
In total, what has been released so far is N274.290 billion”.
The Minister of Defence, Musa Dan Ali, who came with Service Chiefs, said the Chief of Army Staff could not attend the meeting as he was in Yola, where there was an insurgent attack on Sunday, while , the Chief of Air Staff was in Pakistan on official assignment in connection with the directives of President Muhammadu Buhari to rout insurgents by the end of the year.

The minister continued: “I appreciate the immense support by the National Assembly in the fight against insurgency particularly in the North East of the country.

To achieve the desired result, additional funding is required. The sum of N29,958,865,912 is appropriated for operation Zaman Lafia Dole. The sum of N17,468,992,649 is meant for operational allowance and cash allowance for soldiers in the field. We also demanded N8,141,434,769 for logistic support of the Air Force including their fueling. We also have an outstanding balance from the 2015 budget, for the second quarter, which amounts to N4,348,129 billion. We were in serious need of this money so that work will continue towards the deadline given to us.

Another salary amount is requested because of the recent recruitment to make up what we have in the field. We require N1,987,956,475 as well as additional salaries for soldiers who were not included last year and the short officers commanding the soldiers who were recruited, amounting to N420,365,830. As partners in progress against insurgency, I pray this Senate to approve N29,958,865,512 for operation Lafia Dole and other outstanding bills.”

The minister, however, pointed out that the essence of the deadline given to the military to defeat Boko Haram was just a time line. According to him, there are phases in the fight against insurgency.
“The first phase, which we have achieved was to clear the insurgents from taking hold of any part of our country.
“Fighting insurgency cannot be achieved within a day. All we are working for is to ensure maximum security in our country”.
Ali also requested the committee to persuade the Central Bank of Nigeria to grant waiver to soldiers in the field concerning Bank Verification Number (BVN).

Deputy Governor, Operations, Suleiman Barau, who stood in for the CBN told senators the bank had earlier approved the extension requested by Ali.

Credit: TheGuardian

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