Additiional N161bn Needed To Avert Fuel Scarcity - Johnathan

With only 24 days left to the end of the year, President Goodluck Jonathan says the nation would need an additional N161.1bn to pay outstanding and future subsidy claims for the rest of 2012, to avert a looming fuel scarcity crisis. The President said his government’s provision for subsidy payment in the year was underestimated.

Jonathan’s request was contained in a 2012 Supplementary Appropriation Bill he sent to both the President of the Senate, David Mark, and the Speaker of the House of Representatives, Aminu Tambuwal, on Tuesday.

He told the National Assembly leaders that a forensic exercise carried out on subsidy claims for the year showed that government would still need to pay fuel importers a balance of N7,735,756,316.39 after a total of N880, 264,243,683.61 had been paid.

The Federal Government budgeted N888.1bn for the payment of subsidy on fuel in 2012 following the mass protest that greeted the total removal of the subsidy by the President in January.

Part of Jonathan’s letter to Tambuwal reads, “The Rt. Hon. Speaker will recall that as part of the 2012 Budget Framework, a provision of N888.1bn was made for payment of fuel subsidy for the nation.

“I wish to intimate the Honourable House of Representatives of the fact that, following the forensic audit carried out the provision for fuel subsidy in the 2012 Budget was underestimated.

“As of now, the sum of  N880, 264,243,683.61 has been paid out, leaving a balance of N7, 735,756,316.39.

“In order to accommodate the outstanding arrears resulting from the forensic audit exercise and the remaining period of the year 2012, an additional sum of N161,617,364,911 over and above what was programmed to the 2012 framework is required.

“Given the need to maintain a steady flow of petroleum products, especially to the run-up to the festive season, it is my hope that the Honourable Members will kindly accord this request their traditional expeditious consideration and approval.

“Accordingly, I herewith forward copies of the supplemental request for the additional subsidy payment for 2012.”

Minister of Finance and the administration’s coordinating minister for the economy, Ngozi Okonjo-Iweala, on October 21, had said that the government might not need supplementary appropriation for subsidy payments in 2012.

According to her, the N888bn allocated for subsidy payments in the 2012 budget should be enough to pay petroleum product importers.

“We have not exhausted the fund and there may not be a need for a supplementary budget,” Okonjo-Iweala had said.

Jonathan had on January 1, 2012 announced total removal of subsidy on local fuel consumption and per litre pump price of petrol had been fixed at N141.

But protests against the President’s announcement had paralysed activities across the country for about two weeks thus forcing a reversal of the policy.

Following the reversal, the Federal Government had rejigged its budget proposals for the year to include N888.1bn provision for claims under the partial subsidy removal regime.

However, the January mass protest had given rise to a probe of the subsidy payments by the House of Representatives’ panel which found that fuel importers had short-changed the system via false and dubious claims.

Many of the fuel importers are currently under trial for defrauding the country.

As soon as Tambuwal read the Jonathan’s letter to House members on Tuesday, the legislators restated their call for the “full implementation of the 2012 budget.”

The lawmakers had in July asked Jonathan to ensure 100 per cent implementation of the budget by September 18 and threatened to commence impeachment proceedings against the President if he failed to do so.

As of October, the Ministry of Finance claimed that it had released about N1tn or 75 per cent of the total capital budget of N1.3tn to Ministries, Departments and Agencies.

But, lawmakers alleged on Tuesday that releases were not backed by cash 100 per cent, leaving the MDAs with limited funds to execute projects.

The House resolved on Tuesday that its Committees on Finance and Appropriation should compile the total releases for capital projects and produce a report within one week.

The consideration of the report will precede the passage of the 2013 budget.

Chairman, House Committee on Appropriation, Mr. John Enoh, while contributing to the debate, said “unless we are careful, a lot of projects are going to remain unimplemented in 2012.”

Enoh expressed displeasure that with 20 days to the end of the year, the budget was still facing challenges of implementation.

He said, “There are thousands of projects already abandoned. By not implementing this budget conclusively, more projects are going to suffer.

“The last money released in October was N300bn and it brought total releases to 75 per cent. The question is what has happened to the balance of 25 per cent?”

Meanwhile, the 36 state governors, in a December 7, 2012 suit, are asking the Supreme Court to refrain the Federal Government from many further deductions from the Federation Account for the purpose of funding payments of subsidy claims.

In the suit documents copies of which were obtained by one of our correspondents on Tuesday, the state governments are asking for an order directing the Federal Government to pay to them their 24 per cent share of the total amount of money “wrongly” deducted from the Federation Account from 2007 till date.

The Attorney General of Federation and the National Assembly are named as 1st and 2nd defendants in the suit.