[size=14pt]Senate: FG overspends subsidy fund by N1tr[/size]

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Written by Abdul-Rahman Abubakar Thursday, 13 October 2011 05:01
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[Senate President David Mark]

The Senate yesterday asked its committees to investigate how the Federal Government overspent the budgeted funds on fuel subsidy by up to N1.1 trillion since the beginning of the year.
About N240 billion was provided for the subsidies in the 2011 budget, but so far government agencies responsible for running the scheme have spent up to N1.3 trillion this year, the Senate heard through a motion moved by Senator Bukola Saraki yesterday.



The Federal Government has planned to stop the subsidies starting January, but this is facing criticism from labour unions, opposition politicians, lawmakers and many prominent people.

Ending the scheme would inevitably send petrol prices shooting up to about N150 per litre from N65 per litre.

In the motion co-sponsored by 13 other senators yesterday, Saraki said instead of spending N20 billion each month on fuel subsidy as budgeted, government spent up to N165 billion in one month alone in breach of the budget law.

Saraki said government has so far spent about N1.3 trillion on fuel subsidy this year, translating to 700 per cent above the budgeted sum.

He said reports by some prominent foreign economic journals and the Department of Petroleum Resources (DPR) has revealed how volume of fuel imported into Nigeria is inflated fivefold and then smuggled out and sold at higher prices in neighbouring countries after collection of large sums of money as subsidies from the government.

“Fuel subsidy as it is being managed today has become a risk to the entire economy. The implementation of the 2011 Appropriation Act will surely be in trouble waters if a variation of N1.2 trillion arises as a result of the level of expenditure incurred on fuel subsidy so far.

“Although N20 billion was set aside for subsidy on a monthly basis in the Appropriation Act 2011, in August 2011 the total figure expended was N165 billion of which the Nigeria National Petroleum Corporation (NNPC) was N88 billion and the Independent Marketers was N77.7 billion.

“In the first three months of the year both NNPC and the Independent Marketers did not exceed N62 billion monthly but within the last three months figures have ranged between N150 billion and N186 billion,” Saraki said.

Speaking on the motion, Senate President David Mark said the scheme has been hijacked by a cartel operating like Mafia. “Whatever they do is completely exclusive to them. They are very few and 95 per cent of us don’t know what is happening. It is important to investigate the subsidy to know whether or not it has achieved the aim it is set out to achieve,” he said.

Saraki said illegal expenditure on fuel subsidy diminished the power of the National Assembly as the organ of government responsible for appropriation of all public funds.

Debate on the motion soon became a debate on whether to remove fuel subsidy or not.

In his contribution, Senator Ibrahim Gobir (PDP, Sokoto) opposed the proposal to remove fuel subsidy.

“The issue here is about misappropriation of funds in the management of the subsidy fund… I believe that if we look at the management of the fund, it may even be that we don’t need to remove the subsidy after all,” he said.

But Senator Heineken Lokpobiri (PDP, Bayelsa) said the time has come for fuel subsidy to be removed, as “subsidy has only benefitted a few people and it has to go. The people that it is meant to help have not benefitted from it. In my area fuel is sold far above the N65 approved rate.”

After the debate, the Senate asked it committees on Downstream Petroleum Resources, Appropriation and Finance to investigate the whole fuel subsidy scheme and report back.

Last week, President Goodluck Jonathan wrote to the National Assembly on government’s intention to stop subsidising cost of fuel in the country. State governors have already announced their support for the plan.

The outcome of the investigation launched by the Senate yesterday is expected to influence the position that it would take on fuel subsidy.

Fuel subsidies have been a long-standing policy for Nigerian governments to ease the cost pressures on the people.

Ending the subsidy has been met with widespread optimism by international investors, who believe it is inefficient, fuels corruption and holds back the country from reforming its downstream oil sector, Reuters news agency reported.

But many Nigerians view the subsidy as the only benefit they get from living in an oil-rich state and say they would like to see the government cut costs from wealthy politicians before asking more money from subsistence workers.

http://dailytrust.com.ng/index.php?option=com_content&view=article&id=145315:senate-fg-overspends-subsidy-fund-by-n1tr&catid=2:lead-stories&Itemid=8

they forgot to add 1 billion naira on inauguration party

600,000 dollars on iweala every month

1.5 million naira on food every day in aso rock

etc

Is this is government that want to remove fuel subsidy and yet can not subsidies it own budgets and steal by hyper inflting a project worth 20 billion to 165 billion

A BILLION that is a millions in 1000 places

Yet all the infrastructures they claim to have build with this hyper inflated budgets are yet to be seen

reminds me of Onitsha river port etc

In the motion co-sponsored by 13 other senators yesterday, Saraki said instead of spending N20 billion each month on fuel subsidy as budgeted, government spent up to N165 billion in one month alone in breach of the budget law.

Saraki said government has so far spent about N1.3 trillion on fuel subsidy this year, translating to 700 per cent above the budgeted sum.

He said reports by some prominent foreign economic journals and the Department of Petroleum Resources (DPR) has revealed how volume of fuel imported into Nigeria is inflated fivefold and then smuggled out and sold at higher prices in neighbouring countries after collection of large sums of money as subsidies from the government.

“Fuel subsidy as it is being managed today has become a risk to the entire economy. The implementation of the 2011 Appropriation Act will surely be in trouble waters if a variation of N1.2 trillion arises as a result of the level of expenditure incurred on fuel subsidy so far.

“Although N20 billion was set aside for subsidy on a monthly basis in the Appropriation Act 2011, in August 2011 the total figure expended was N165 billion of which the Nigeria National Petroleum Corporation (NNPC) was N88 billion and the Independent Marketers was N77.7 billion.

“In the first three months of the year both NNPC and the Independent Marketers did not exceed N62 billion monthly but within the last three months figures have ranged between N150 billion and N186 billion,” Saraki said.

Speaking on the motion, Senate President David Mark said the scheme has been hijacked by a cartel operating like Mafia. “Whatever they do is completely exclusive to them. They are very few and 95 per cent of us don’t know what is happening. It is important to investigate the subsidy to know whether or not it has achieved the aim it is set out to achieve,” he said.

This is a very good development indeed. The average Nigerian would learn why having the fuel subsidy in its present form is really bad for us. At last someone has been able to put a monthly figure on what this legalised fraud costs the country. 1.2trillion in one month no be beans, the subsidy has got to go!

alj_harem:



they forgot to add 1 billion naira on inauguration party

600,000 dollars on iweala every month

1.5 million naira on food every day in aso rock

etc

Is this is government that want to remove fuel subsidy and yet can not subsidies it own budgets and steal by hyper inflting a project worth 20 billion to 165 billion

A BILLION that is a millions in 1000 places

Yet all the infrastructures they claim to have build with this hyper inflated budgets are yet to be seen

reminds me of Onitsha river port etc

I can see you have been saying and dramatizing over Iweala's salary.
Give me an authentic source of Iweala's take home pay.
If it's true, I relax101 will condemn such act but If you fail to provide a very good source, I will make sure I shoot you dead from my laptop.
Your time starts now.

^
Don't waste time on rumour mongers.

It makes economic sense for fuel subsidy to be removed but does it make social sense? Does it make political sense? And curiously, again, does it make economic sense (inflation, unrest, etc)? How about the timing and the fact that refineries are not working and power is yet to be stable?

If government cannot sanitize the subsidy chain now (price inflation) or tackle smuggling of fuel at the borders, what's the assurance that the expected savings from subsidy removal would be well-utilized? How many other sectors or products are also suffering as a result of the porous borders?

The best way to deal with those profiteering from the subsidy is to ensure we stop importing refined products in say, 18-24 months from now.

Would the Senate have bothered to probe this if the President had not started talking about subsidy removal? How many similar issues that need attention are being ignored?

What good has ever come out of investigations by senate committees or probes? This appears to be another round of hot- air blowing around. We'll see.

naaa wow

BEAF pls advice your man not to spend nigeria money building 3 refineries in indonesia instead of in Nigeria. On fuel subsidy,senate shld nt allow these enemies of d ppl to remove the fuel subsidy. He shld go and borrow some balls and go and fight the oil marketers who are sabotaging the subsidy programme,stealing d country's resources because d govt in power can't do anything.Its d ppl dt voted for him ,i did not. I didn't believe in him and so i'm nt disappointed.It's nt d oil marketers alone that voted for him.

alj_harem:



they forgot to add 1 billion naira on inauguration party

600,000 dollars on iweala every month

1.5 million naira on food every day in aso rock

etc

Is this is government that want to remove fuel subsidy and yet can not subsidies it own budgets and steal by hyper inflting a project worth 20 billion to 165 billion

A BILLION that is a millions in 1000 places

Yet all the infrastructures they claim to have build with this hyper inflated budgets are yet to be seen

reminds me of Onitsha river port etc

when IBB,BUHARI,ABACHA AND OTHER BIGOTS were stealing the s*h*i*t of this country, where were you

removing fuel subside is a gud idea bt whas d assurance dat d removal will improve d life of d common man.am very sure dat dis money will be embezzled by sm crook in power.NLC show set sm rules 4 d removal b4 accepting:constant 24hrs power supply,improved railway transport system linking all d 36 states in nigeria,constructions of refinaries at least one located in each of d 6 geo geographical regions of the country wiv 70 percent of its man power locally source nd review of the revenue sharing formular either 50/50 or 55/45 finally repair of roads.after all dis has been done fuel subside cn be removed dere after

Last week, President Goodluck Jonathan wrote to the National Assembly on government’s intention to stop subsidising cost of fuel in the country. State governors have already announced their support for the plan.

The government should remove the subsidy sharp sharp.

fuel subsidy removal or no removal. it doesnt make any difference to me, dollars is going up and each time the CBN intervenes to reduce dollar price to naira,. the reserves goes down, at the end of the day what happens?
I support the removal of fuel subsidy on one condition, if i have to buy fuel at 150 naira then the fed gov should remove subsidies they enjoy like their allowances and all, that way we can move forward else it would just amount to raping the masses in broad daylight.

But many Nigerians view the subsidy as the only benefit they get from living in an oil-rich state and say they would like to see the government cut costs from wealthy politicians  before asking more money from subsistence workers.

There will be more benefit from removing oil subsidy.

NOW I C Y THEY WANT TO REMOVE FUEL SUBSIDY.THEY DON CHOP THE SUBSIDY FOR THE NEXT 5 YRS FINISH.U GOTTA B KIDDIN ME.N1.4tr?*sobs*

They government should do their part by providing the necessary amenities(Electricity, Transport, Functioning Refineries etc), then we will support the removal. Until then no way, no way

subsidy removal was ill-conceived.seems Gej doesnt even know what to do anymore,introducing bogus initiatives by the day.