Leadership (Abuja)

12 December 2012

Nigeria: Christmas/New Year Celebrations - Jonathan Seeks N161 Billion to Avert Fuel Scarcity

President Goodluck Jonathan yesterday sought approval from the National Assembly for a supplementary budget of N161.6bn in the 2012 fiscal period, an amount meant to avert fuel scarcity during the festive yuletide.

Jonathan's request, coming barely two weeks to the end of 2012 fiscal year, was conveyed in a letter read on both floors of the Senate and House of Representatives by Senate President David Mark, and Speaker Aminu Waziri Tambuwal respectively.

The president explained that the additional request emanated from a forensic audit which revealed that the N888.1billion provided for fuel subsidy in the 2012 budget was not enough.

He added that while the sum of N880.1billion had been paid out for subsidy, leaving a balance of N7.7billion.

The letter reads in part: "You will recall that, as part of the 2012 budget framework, a provision of N888.1 billion was made for payment of fuel subsidy for the nation. I wish to intimate the distinguished Senate of the fact that, following the forensic audit carried out, the provision for fuel subsidy in the 2012 budget was underestimated. "As at now, the sum of N880,264,243,683:61 billion has been paid out, leaving a balance of N7, 735, 756, 316: 39 billion.

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

"Given the need to maintain a steady flow of petroleum products, especially in the run-up to the festive season, it is my hope that the distinguished senators will kindly accord this request their traditional expeditious consideration and approval," he said.

We've Not Abandoned Subsidy Report - Tambuwal

Meanwhile, Tambuwal said yesterday that the House had not abandoned the fuel subsidy report.

Tambuwal gave this assurance during a courtesy visit on him by officials of the Anti-Corruption Network, an NGO led by former lawmaker, Dino Melaye.

LEADERSHIP recalls that the House had, after an emergency session on January 8, conducted a probe of the fuel subsidy regime in the country following which some oil companies were indicted. But little is heard of the matter these days after the lawmaker heading the probe committee, Farouk Lawan, was accused of receiving bribes, prompting fears that the House were cooling off the issue.

Tambuwal, however, said, "We have not abandoned the subsidy report. Anyone who thinks we have abandoned it is wasting his time," he said, insisting that all those involved in the scam would be prosecuted.

The Speaker identified corruption as one of the fundamental problems confronting the country, and said that legislators were doing their best "as a House to address the issue."

Lamenting that efforts being made by the House to fight corruption were not being supported by some agencies, he, however, assured the NGO that all the issues raised by it were receiving the attention of the House. Melaye had urged the House to remove the immunity clause from the 1999 Constitution in the ongoing review, saying do so would make public office holders live above board. He also called for the separation of the offices of the attorney-general and the minister of justice

Tambuwal commended the NGO over its campaign for a corruption-free country and expressed the willingness of the House to collaborate with it and other like-minded organisations.

Govs take FG to S'Court over subsidy deductions

In a separate development, the 36 state governors have asked the Supreme Court to compel the federal government to give account of all subsidy claims deducted from the federation account from 2007 till date, and to also pay back into the federation account all such deductions.

The governors accused the federal government of making a total N3.7 trillion expenditure on fuel subsidy between 2006 and 2011, saying the trial will prove the accuracy of this figure.

A team of six lawyers, including Joseph Bodunrin Daudu (SAN) and Prince Lateef Fagbemi (SAN), that approached the apex court on behalf of the attorneys-general of Abia State and his counterparts from the other 35 states, named the attorney-general of the federation (AGF) and the National Assembly as co-defendants.

The plaintiffs said that the federal government not only lacked constitutional power to make the deductions, but that the illegal directives it gave the Petroleum Products Pricing and Regulatory Agency (PPPRA) gave the agency the opportunity to honour unverified vouchers from importers of petroleum products to the detriment of all the plaintiffs.

The 36 governors requested the apex court to make "a restitutionary order directing the federal government to pay to the plaintiffs their 24 percent share of the total amount of money wrongly deducted by the federal government from the federation account from 2007 till date."

In their statement of claims, the plaintiffs averred that when they collect revenues, they make such remittance without making any form of deductions from the revenue so collected despite the fact that they also incurred expenses in the course of collecting and remitting the revenue to the federal government.

The plaintiffs said at the trial that they would rely on reports and other accounts provided by the Ministry of Finance, office of the Accountant General, CBN, Budget Office, NNPC, DPR, FIRS, PPPRA and the Petroleum Support Fund Guidelines "to ascertain and determine the quantum of revenue which should have accrued to them but which have not, due to the unwholesome and unconstitutional practice of the defendants."

Querying the method of payment, the governors stated that " the Federal Government between 2006 and 2011 has shown a tendency to make extra budgetary appropriations not approved by the (National Assembly).

"Therefore over the last few years there has been a disparity in relation to the amounts appropriated for fuel subsidy payments in the national budget and the actual payments made in those calendar years."

The governors averred that there were inaccuracies in the crude oil and gas revenues remitted to the Federation Account by the Nigerian National Petroleum Corporation (NNPC) caused by wrongful deductions at source by the NNPC to fund her operations.

Referring to a November 22, 2010 report of the Federal Ministry of Finance, entitled "the Interim Report on the Process of Forensic Review of NNPC", the governors contended that the actual remittance of proceeds for domestic crude sales to the Federation Account was far less than the amount expected.

The plaintiffs averred that the practice of paying the fuel subsidy from the crude oil account by the NNPC with the authority and approval of the AGF was "unconstitutional" and a " flagrant contravention of Section 162(1) of the 1999 Constitution because crude oil money ought to be remitted with zero deductions into the federation account."

They averred that as a result of deliberate delays of receipts of subsidy advice from PPPRA, which normally results in under-remittance of domestic crude sales proceeds into the federation account, there was over deduction in 2007, 2008 and 2009 which was estimated at N2 billion, 10,3 billion and 16.2 billion respectively.

The governors accused the federal government of using the NNPC to deduct, without approval, the fuel subsidy claim from source as if same is a first line charge, an action, they described as illegal and contrary to the provisions of Section 80 and 162(1) of the 1999 Constitution as amended.

The plaintiffs accused the NNPC of usurping the functions of the PPPRA as the latter was made to honour unverified vouchers from importers of petroleum products.

Consequently, they urged the apex court to declare federal government's actions in this unconstitutional, unlawful, null and void and to make "a perpetual order of injunction restraining the federal government or its agents from making any further deductions from the amount standing to the credit of the federation account for the purpose of funding the payment of the fuel subsidy claims or any other purpose whatsoever, except those authorized by section 162 of the 1999 Constitution of the Federal Republic of Nigeria."

Govs want $1bn from excess crude account

Governors of the 36 states of the federation yesterday demanded for the release of 1 billion US dollars from the excess crude account to enable them pay for contracts executed and on-going ones.

The governor made the demand, despite a lingering legal action still pending before the Supreme Court between them and the federal government of the excess crude account.

The governors made this demand at the National Economic Council (NEC) meeting at the Presidential Villa. The Nigeria Governors' Formula (NGF) had on Monday night met at the Rivers state Governors' Lodge where they resolved to make the demand.

The governors argued that the $1 billion from the excess crude account became necessary to assist them pay debts owed contractors and complete ongoing ones.

According to Deputy Governor of Sokoto state, Alhaji Mukhtari Shagari, the governor's demand was already being considered and a decision would be taken after legal counsel has been sought and given by Justice Minister and Attorney General of the Federation, Mohammed Adoke since the matter was still pending before the apex court.

Briefing State House Correspondents after the meeting alongside his Ekiti and Ebonyi counterparts, Gombe State Governor, Ibrahim Dankwambo hinted that NEC deliberated on the level of negotiations between federal government and the states on the rift bordering on the true status on of the excess crude account.

He said, "It was advised that negotiation should continue pending the court decision on the matter".

He further disclosed that NEC's findings revealed that about N100billion was still needed to pay all outstanding subsidy claims.

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