 |
Ngozi Okonjo-Iweala
|
Once again, there is creeping
confusion, some say deliberate obfuscation, over the amount being paid on fuel
subsidy to marketers.
The House of Representatives Ad hoc Committee
set up in the wake of last January’s nationwide protest against fuel subsidy
removal, had found that government paid out N230 billion to marketers for
products never delivered in 2011. This was corroborated by a presidential
committee. But one year on, it not just that no one has been convicted for this
massive fraud, the government is now indicating that the subsidy payments for
2012 would overshoot the 2011 figures, even though oil prices for the period
remain unchanged.
The subsidy fiasco has cast doubts on
the administration’s oft-repeated commitment to managing the fuel subsidy
scheme transparently, even as it now seems that the subsidy overpayments might
well have been by design. In a recent legal suit filed at the Supreme Court,
the Governors’ Forum claimed that the Federal Government had issued an “illegal
directive which made the Petroleum Products Pricing and Regulatory Agency
(PPPRA) to honour unverified vouchers from importers of petroleum products.”
The implication is that the
presidential verification exercise into the 2011 fuel subsidy payments was a
mere façade that did not have the final word. Based purely on the subsequent
claims of unnamed indicted oil marketers that they were owed N29 billion,
Finance Minister Ngozi Okonjo-Iweala told the 18th Nigerian Economic Summit
that the administration had decided to forgo the said amount.
Similarly, the PPPRA in an obvious
afterthought said on December 17, 2012, that “the 2011 arrears later shot up to
N451 billion” and had been paid. Those payments together with the ministerial
dash of N29 billion, which were apparently effected on the strength of what the
governors called “illegal directive,” did not follow due process and are,
therefore, unacceptable. The payments should be refunded. The plausible subsidy
figure remains that of the presidential subsidy verification committee
indicating that the N1.3 trillion paid in 2011 included an overpayment by an
amount of N232 billion. That leaves the balance of N1.068 trillion as the
probable level of fuel subsidy in 2011. Government should take immediate steps
to recover all overpayments made, plus the cleared unverified arrears.
In the first week of December, the
PPPRA revealed that cumulative subsidy payment in 2012 from January to October
was N679 billion, representing about 74 per cent of the average verified
subsidy paid in 10 months in 2011. No outstanding arrears were reported at the
time. At that rate of disbursement, the initial 2012 budgetary provision of
N888.1 billion would be more than adequate. Surprisingly, in the second week of
December, President Jonathan forwarded to the National Assembly a request for
N161.6 billion supplementary subsidy budget, which pushes the 2012 provision to
N1.05 trillion. This latest figure misses the 2011 verified total subsidy
payment of N1.068 trillion by the hair’s-breadth of 1.7 per cent. Despite the
Senate’s approval of the supplementary request, the revised provision is
untenable for two related reasons.
Firstly, the implication of the
revision is that anticipated subsidy disbursements for November and December
alone would amount to 55 per cent of the subsidy incurred in the first 10 months
of the year. That is preposterous. Secondly, international crude prices in 2011
have generally held in 2012. And at N97/litre, subsidy on petrol in 2012 has
only been slightly above half of its level in 2011 when petrol sold for
N65/litre. Thus the virtual parity of 2011 verified subsidy payments and the
requested 2012 subsidy provision would imply that in 2012, there has been a
phenomenal increase in fuel consumption over and above the level in 2011, an
outcome which the January-through-October consumption, reflected in the settled
subsidy for the period, clearly does not signify.
It is not sufficient for the Jonathan
administration to submit global subsidy costs for legislative approval. The
administration should additionally account for all subsidy disbursements with
matching fuel consumption data “based on certified truck outs at depots
confirmed at the retail outlets.” The excess provisions contained in the 2012
supplementary subsidy budget (the PPPRA has even projected that the budget
could reach N1.23 trillion) should not be paid out under the so-called “illegal
directive.” The National Assembly should closely monitor the implementation of
the fuel subsidy regime on a monthly basis.
The Nigerian people, the repository of
sovereignty, have demonstrated their preference for the retention of fuel
subsidy. Government should realise that utilised fuel or energy is for
productive rather than wasteful consumption. Cheap energy promotes economic
growth. Most OPEC countries subsidise fuel prices.
In Venezuela, for instance, petrol
sells for about N7/litre. The House Adhoc Committee has shown that through
partial or full swap arrangement and alternatively through outright sale,
proper management of the 445,000 barrels of crude oil per day for domestic use is
sufficient to provide the country with practically all its fuel needs.
That is the challenge before the
Jonathan administration, and not any more payments to bogus fuel marketers.
Culled from The Guardian.
No comments:
Post a Comment