In the last 10 days, Nigerians have been pretty surprised at the disgusting, if not sickening and disheartening revelations from the House of Representatives Ad hoc Committee probing the handling of fuel subsidy in Nigeria.
The Farouk Lawan-led ad hoc committee have been told sundry stories ranging from massive corruption going on in the petroleum industry sector to how those in charge have been importing crude oil for the Kaduna Refinery; the dispute over the actual number of barrels produced per day, lack of valid documentation and how vessels berthed in neighbouring countries and general lack of transparency.
The Committee announced on Thursday that total subsidy claims to be paid by the Federal Government on imported fuel in 2011 might hit “over N2trillion.”
The committee stated this in the light of fresh revelations that many marketers had outstanding claims to be paid by government running into billions of naira. It would be recalled that the Minister of Finance, Mrs. Ngozi Okonjo-Iweala, and the Central Bank of Nigeria (CBN) had given the committee two conflicting figures on the subsidy claims for 2011. Whereas the minister is of the opinion that the total amount paid as at December 2011 was N1.4tn, CBN’s figure of what it called the “actual” payment, was N1.7tn.
According to the chairman of the committee, Hon. Lawan, more marketers had appeared to testify that the government owed them money for products they imported, adding that 100 marketers were awarded contracts to import fuel in 2011, rising from about 49 in 2010.
These are mind bogging revelations and to correctly situate this development, one must ask: How did it all start or what is the genesis of all this?
About four months ago, precisely on Tuesday, September 13, 2011, former Kwara State governor, Senator Abubakar Bukola Saraki, representing Kwara Central Senatorial District, raised a motion on the floor of the Senate which was co-sponsored by 14 other senators for the lawmakers to closely scrutinise the subsidy regime within the ambit of the law so as to avoid serious damage to the budgetary allocations for the year.
But the motion could not be full heard until about a month later on October 12, 2011. And when it did, it turned out to be an eye opener for many who never knew the goings on in the fuel subsidy regime.
Senator Saraki, the immediate past chairman of the Nigerian Governors’ Forum (NGF), argued that the Federal Government operates a fuel subsidy regime with the primary purpose of making petroleum products not only available but at the same time designed to cushion the possible effect of the true market prices on the populace.
He noted that because the fuel subsidy scheme was a long-standing government palliative action to help the Nigerian people, the motion did not aim “by any guise” at removing the fuel subsidy.
He however insisted that in sponsoring the motion, he was propelled by the need to make the scheme more transparent, corruption-free and competitive within an appropriate legislative framework and in compliance with the Appropriation Act.
The senator stated that according to the 2011 Appropriation Act, N240 billion, which equals to N20 billion a month was allocated for the implementation of the fuel subsidy.
He noted further that out of the N20 billion monthly allocation, N11.2 billion was voted for Domestic Fuel Subsidy (NNPC) and N8.8 billion for Domestic Fuel Subsidy (Marketers).
He observed that whereas N20 billion was the amount set aside for subsidy on a monthly basis in the 2011 Appropriation Act, in the month of August 2011 alone, the sum of N165 billion was expended on subsidy out which the Nigerian National Petroleum Corporation (NNPC) got N88 billion and independent marketers N77.7 billion.
Senator Saraki added that of the total N240 billion budgeted for the entire year, a total of N931 billion had been spent as at August ending, which according to him, translates in simple Arithmetic to a difference of N771 billion or 700 per cent above the budget.
He tried to do a contrast and between what obtained in the first quarter of the years and the last quarter to graphically demonstrate his concern about the way the subsidy regime was being handled. He noted that in the first three months of the year, both NNPC and the independent marketers did not exceed N62 billion monthly but was surprised, so to say, that within the last three months, the figures had jumped from between N150 billion and N186 billion.
In his words: “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 then urged the Senate to review the standards of legislative oversight, with a view to enforcing stricter compliance and enforcement of the Appropriation Act and rein in government agencies to the control of enabling laws passed by the National Assembly.
“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”.
Senator Saraki was unequivocal about the intention of the motion. For him, it was not to witch-hunt anyone or coerce the Federal Government to end it or remove subsidy the way the government did on January 1, 2012 but to instill a process of transparency.”The Senate should note that the wide disparity between what was budgeted for fuel subsidy scheme and what is expended goes to the integrity of the budget and an erosion of the authority of the National Assembly.
“This motion isn’t just about subsidy; it goes to the heart of the budget process and why we are here. Today, it’s the petroleum sector, tomorrow, it may be another sector. As at the time I moved the motion on September 13, the subsidy was N1. 3trillion. We’ve been told that it is now N1. 5trillion. Now, it has risen to 700 percent above budget.
“I believe 700 percent is a real slap on the budget process.
“The motion is not targeted at an individual, it’s a systemic thing. The motion is about the level of wastage, corruption, lack of transparency that has brought us here. These figures are too huge for us to ignore. We must act fast in view of the challenges ahead.
“This chamber owes it to Nigerians to unravel what’s happening. How else do we explain that in one accounting year, we are spending N1.2 trillion on petroleum subsidy, which is 14 times the value of capital budget for the power sector in 2011, or 14 times power capital (N87 billion) or nine times for roads or 24 times for health or more alarming, four times defense and security budget?
“Those who are charged with revenues of this country must be called to account for every monies they received on behalf of the country.”
Talk of a motion brimming with facts and figures. The motion could be said to be the work of a lawmaker who has decided to add the job of a whistle blower to his arduous tasks of lawmaking and oversight functions for the good of fatherland.
Perhaps, the importance of the motion would have been lost had the Federal Government not by omission or commission played a fast one on Nigerians on January 1, by announcing the removal of fuel subsidy. The angry reactions of Nigerians to the timing, repercussions and economic burden it foisted on them almost instantly led to whole week of protests across the nation in which some innocent lives were lost.
It forced the leadership of the House of Representatives to convene an emergency meeting even on a Sunday at which the fuel subsidy regime was debated. At the end of the day, the House set up the ad hoc committee to probe the management of subsidy. Many who were quick to disparage the action and intention of the House as merely populist and perhaps playing to the gallery might have now seen the usefulness of the committee and the sitting of that day.
But as the hearing continues at the House, let the lawmakers and policy makers always remember the major objectives of the motion as moved by Senator Saraki, to wit that while curbing corruption in the system and enthroning transparency the masses must be assisted to live comfortably with the cost of importing fuel by a crude oil producing nation and a member of the Organisation of Petroleum Exporting Countries (OPEC).
Already, human rights activist and firebrand lawyer, Femi Falana has charged the House not to sweep the revelations at the committee’s hearing under the carpet.
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Subsidy: House calls executive to account