Fuel Subsidy: House Passes N162bn Supplementary Budget

20 Dec 2012

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President Goodluck Jonathan

Onwuka Nzeshi 
in Abuja

The House of Representatives yesterday passed the N162 billion proposed by the executive arm of government  as  supplementary budget to be deployed to  the payment of fuel subsidy.

The passage of the budget at the Committee of Supply was preceded by an executive session which lasted over two hours.

The closed-door session, THISDAY learnt, was convened to enable the lawmakers  brainstorm on the 2013 Appropriation Bill.

There was no formal briefing on the outcome of the executive session which  ended at 4.20pm but insider sources said lawmakers were working on the prospects of passing the budget today (Thursday), the last sitting day before the parliament proceeds on  Christmas holidays.

The House passed the extra budget after it considered the report of  the Joint House Committee on Finance, Appropriation, Petroleum Upstream and Petroleum  Downstream on the money bill.

President Goodluck Jonathan presented the  supplementary budget recently  to the National Assembly and requested that the bill be given accelerated passage.

The lawmakers in the lower chamber of the National Assembly had earlier picked holes in the budget proposal, describing it as bloated.

Some had  dismissed it as the figment of imagination of the executive and almost threw it out when the money bill got to the second reading stage.

However, at the plenary  yesterday, Chairman, House Committee on Appropriation, Hon. John Enoh, said  that following the committee’s interactions with the Department of Petroleum Resources (DPR), Petroleum Product Pricing Regulatory Agency (PPPRA) and Budget Office of the Federation, N161,617,364,911 supplementary budget was right on track.

Enoh  explained that interface revealed that  the N888 billion earlier budgeted for fuel subsidy also included the sum of N232 billion earmarked for the payment of arrears arising from 2011 subsidy claims, N650 billion for 2012 claims.

Enoh said that even at that, the 2011 subsidy  arrears later rose  to N451 billion leaving behind the sum of N437 billion only for 2012 payments.

He said that so far N605 billion subsidy claims have been processed and awaiting payment.

According to Enoh, the remaining portion of the funds budgeted for subsidy was  grossly inadequate hence  the need  for the N162 billion supplementary budget.

Meanwhile, the House yesterday reaffirmed the joint position of the National Assembly on the $79 per barrel as benchmark for the 2013 budget.

Also, yesterday, the House passed through second reading a bill seeking to entrench  local content in the construction industry.

In another development, House yesterday demanded the sack and prosecution of the Director General, Nigerian Civil Aviation Authority (NCAA), Dr. Harold Demuren, over alleged professional and  criminal negligence which, they said,  led to last June’s  crash of a Dana Airline aircraft in Lagos.

This came as the House yesterday passed the  N162 billion proposed by the executive arm of government  as  supplementary budget to be deployed to  the payment of fuel subsidy.

The lawmakers also demanded that  Dana’s  current Airline Operating Certificate ( AOC) should be revoked because it was not issued in compliance with Nigerian Civil Aviation Authority (NCAA) Civil Regulations Guideline 2009.

Similarly, the lower chamber said the  NCAA inspector, Suleiman Akwuh who did pre-arrival inspection on the ill-fated Dana Aircraft without pre¬requisite professional qualification should be dismissed from service.

These were the resolution reached after the House considered and adopted the recommendations of the report of the Senate and  House Joint  Committee on Aviation on the crash of the Dana Airline.

The House stated that the Director-General who approved and deployed the officer should be sanctioned for professional negligence.

The report observed that Nigeria Airline Operators have problem of accessing money from the bank with stringent collateral conditions and short repayment term.

According to the report,  the Central Bank of Nigeria (CBN) N200 billion Aviation Intervention Fund was used to refinance existing facility with banks instead of improving the services and capital needs of airlines.

The report disclosed that Air Nigeria through United Bank for Africa (UBA), accessed N35.5 billion from Federal Government Aviation Intervention Fund and diverted same to other businesses.

“The committee found out that the age of the ill-fated Dana aircraft is 22 years. It also  found out that there is no functional and well-equipped maintenance hanger of international standard in Nigeria. The Airfield Lighting System which has been the statutory responsibility of Federal Airports Authority of Nigeria (FAAN) as stipulated in Part II Section 3 of its Act in Cap F5 Law of the Federation of Nigeria was transferred to Nigeria Airspace Management Agency (NAMA) by Federal Ministry of Aviation in violation of the provision of the existing law.

It said the NCAA under the leadership of the current Director-General, Dr. Harold Demuren brought in MD83 to operate in Nigeria even when there was  no licensed engineer rated on the aircraft.

“For the period under review Dana operated 14 air returns caused by system failure which is a sufficient indication of imminent danger.

“Up to the time of this report, NCAA is still without any licensed engineer type-rated on MD83 yet it is going ahead with technical audit on Dana operations with a view to restore its license. This constitutes negligence.

“The tenure of the current Director General of NCAA has expired three months before Dana crash occurred on June 3, 2012. So the current Director General of NCAA, Dr. Harold Demuren, should be removed from office for professional negligence and incompetence.

“The staff strength of NCAA should be totally overhauled with a  view  to  inject  technically  and  professional  qualified personnel to enhance its regulatory role in line with    international best practices,” the report said.

Chairman, House Committee on Aviation, Hon. Nkeiruka Onyejeocha, who gave a synopsis of the report, said the  Accident Investigation Bureau (AIB) should be properly equipped with modern laboratory  facilities to enable it discharge its responsibilities.

Onyejeocha also said the MD83 aircraft should be phased out of Nigeria aviation industry as NCAA has no certified engineer on MD83 in its employment more so that the aircraft had been decommissioned by its manufacturers.

“The Federal Airport Authority of Nigeria (FAAN) and indeed Nigerian Airspace Management Agency (NAMA) should be properly equipped with well trained staff and equipment for the purposes of responding promptly and adequately to air accident in the country.

“The Federal Government through the Ministry of Aviation should create incentive for indigenous airlines by providing special intervention fund to encourage growth in the aviation industry.

“The CBN should recover the N35.5 billion which was extended to Air Nigeria through UBA but was diverted to other uses.

“The Federal Government should endeavour to put in place a hanger of international standard to reduce cost of aircraft maintenance by airline operators in Nigeria. The Air Field Lighting System should be returned to FAAN without further delay.

“An age limit of not more than 15 years should be placed for new acquisition for passenger aircraft and 20 years for cargo aircraft,” the report said.

Tags: News, Nigeria, Featured, Fuel Subsidy, N162bn, Supplementary Budget

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