House Suspends Consideration of N162bn Extra Fund for Fuel Subsidy

13 Dec 2012

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House of Representatives Speaker, Hon. Aminu Tambuwal

Davidson Iriekpen, Muhammad Bello and Onwuka Nzeshi
House of Representatives Speaker, Hon. Aminu Tambuwal, Wednesday tactically stood down further consideration of the request by President Goodluck Jonathan for an additional N161,617,364,911 to fund the fuel subsidy scheme.

He suspended debate on the Supplementary Appropriation Bill, through which the president is seeking legislative mandate for more cash for the subsidy scheme, following stiff opposition by some lawmakers.

Also yesterday, the president and Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, met with the leadership of the National Assembly to facilitate the smooth passage of the 2013 budget, the supplementary budget and other fiscal issues that require the approval of the lawmakers.

Jonathan, on Tuesday, had presented the Supplementary Appropriation Bill to the House and requested the lawmakers to give it an expedited passage.

The bill, if passed, will bring the total fund the Federal Government will be earmarking for the fuel subsidy scheme this fiscal year to the N1 trillion mark.

The National Assembly had earlier passed the provision of N888.1 billion contained in the 2012 budget for the payment of fuel subsidy.

However, the president in his letter to the legislature for more funds for the scheme said the extra cash was necessary as government had discovered after forensic audit carried out by the Federal Ministry of Finance and the presidency that the budgetary provision of N888.1 billion was grossly underestimated to settle outstanding claims. 

Jonathan in a letter dated December 5, 2012 to the National Assembly requested the House to approve the additional sum for the settlement of fuel subsidy liabilities.

The letter read in parts: “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 at 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.”

When the bill came up for second reading yesterday, lawmakers were sharply divided on whether to reject it outright or go ahead with its consideration.

House Leader, Hon. Mulikat Akande-Adeola, who led the debate, urged her colleagues to support the bill to ensure that the Federal Government had enough resources to settle its liabilities to fuel importers as a way of avoiding fuel scarcity that could mar the Yuletide celebration.

Shortly after her introductory remark, subsequent contributors to the debate raised objections to the bill.

Some of the lawmakers said they found it difficult to support the bill because the executive arm of government had not provided detailed information on how the initial N888.1 billion appropriated for fuel subsidy in the 2012 budget was spent.

The bill opponents expressed doubts if the funds earlier appropriated for fuel subsidy was judiciously applied.

Others claimed that to grant the supplementary budget speedy passage would amount to succumbing to the blackmail of the so-called cabal in the fuel importation business.

However, when Tambuwal saw the trend contributions to the debate was taking and fearing that it could lead to the rejection of the president’s request, he ruled that further debate on the supplementary bill should be suspended to enable the House to resolve the grey areas.

He said the debate would resume today when four committees — Petroleum Resources (Upstream), Petroleum Resources (Downstream), Finance and Appropriation — are expected to brief members on the implementation of the fuel subsidy scheme.

Tambuwal said given the wide-range of issues raised against the bill, there was need to put the bill on hold to allow the committees provide answers to the many questions raised by the lawmakers.

The expected briefs, he said, would determine whether the House would reject the bill or approve it.

While the House is still mulling what to do with the president’s request for more cash for fuel subsidy, human rights lawyer, Mr. Femi Falana (SAN), yesterday urged the National Assembly not to pass the bill.

He urged the lawmakers to invite Okonjo-Iweala, and the Executive Secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA), Mr. Reginald Stanley, to justify the request as the figures emanating from the fuel subsidy regime do not add up.

In a statement obtained by THISDAY and titled: “Why the National Assembly should not pass the Supplementary Appropriation Bill of N161 billion for fuel subsidy,” Falana said in 2011, the National Assembly appropriated N245 billion for fuel subsidy and that in violation of the Appropriation Act 2011 and the Fiscal Responsibility Act, 2007, the Central Bank of Nigeria (CBN) paid N2.3 trillion for fuel subsidy based on alleged fraudulent recommendations of the Ministries of Finance and Petroleum Resources.

He said following the investigations conducted into the fuel subsidy scam by the House, N888.1 billion was appropriated by the National Assembly for fuel subsidy in 2012.

He recalled that while defending the 2013 budget before the House a fortnight ago, Stanley had told the legislature that a total sum of N679 billion had been spent on fuel subsidy from January to October 2012, and that N670 billion had been saved by the Federal Government.

According to Falana, at an average of N67.9 billion per month, N135 billion is required to settle the fuel subsidy bill for November and December.

He said if the amount is deducted from the N208 billion in the fuel subsidy account, there should be an outstanding balance of N72.2 billion in the account at the end of the year.

“In the light of the foregoing, the National Assembly should not approve the Supplementary Appropriation Bill of N161 billion for fuel subsidy to cover November and December, 2012.

“The Minister of Finance, Dr. Ngozi Okonjo-Iweala, and the Executive Secretary of PPPRA, Mr. Reginald Stanley, should be invited to the National Assembly to justify the bill as the figures don’t add up,” he said.
For hours yesterday, the president and Okonjo-Iweala met with the leadership of the National Assembly to seek the support of the lawmakers for the passage of the 2013 budget and the supplementary budget, among others.

The meeting, which started at about 7pm at the presidential villa, was attended by Senate President David Mark, Tambuwal, Director General, Budget Office, Mr. Bright Okogwu, and other members of the National Assembly leadership.

Last week, the president held a similar meeting with Mark and Tambuwal, both of whom later departed the villa along with Rivers State Governor, Mr. Chibuike Amaechi, without disclosing what transpired to journalists.
A source told THISDAY yesterday that the president met with the leadership of the legislature to seek their support towards the passage of some bills crucial to the smooth running of government.

“As you know, the Federal Government is committed to resolving the payment of the fuel subsidy claims, for which it requires N100 billion. It also needs to sort out the request by the state governors to withdraw $1 billion from the Excess Crude Account.

“In order to meet all these demands and others, the president needs to sit down with the legislators to find a middle course,” the source said.
Mark, who declined to disclose the agenda of the meeting, told reporters that the meeting was inconclusive.

He said they would reconvene today for further discussion.
Meanwhile, the House Committee on Finance which threatened on Tuesday to arrest the heads of some revenue generating agencies, including the CBN and Nigerian National Petroleum Corporation (NNPC), has postponed its meeting with the  agencies.

The agencies were absent but the committee yesterday met briefly with representatives of the Office of the Accountant General of the Federation, Budget Office of the Federation and the Fiscal Responsibility Commission.  
Chairman, House Committee on Finance, Hon. Abdulmumuni Jibrin, said the meeting had to be shelved because the agencies that were present did not submit some of the vital  documents requested by the committee.

Tags: News, Nigeria, Featured, House, N162bn Extra Fund, Fuel Subsidy

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