House Committee Probes Non-remittance of FERMA’s 5% Petroleum Products User Charge

•Minister says N880bn needed annually to properly maintain roads

Emmanuel Addeh in Abuja

The Ad-hoc Committee constituted by the Nigerian House of Representatives to investigate the non-remittance of the statutory 5 per cent user charge on petroleum products to the Federal Roads Maintenance Agency (FERMA), has begun sitting in Abuja.

At a public hearing on the implementation of the charge, the Chairman of the Committee, Francis Waive, stated that the hearing would ensure that the circumstances surrounding the non-implementation of the law is unraveled.

He stated that the petroleum ministry, ministry of finance, Federal Inland Revenue Service (FIRS), the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Nigerian National Petroleum Company Limited (NNPC) among others, are expected to appear before the lawmakers in the course of the hearing.

According to him, the volume of funds collected, if any, as well as the manner it was utilised will be investigated, stating that the implementation of the user charge would go down in history as one of the achievements of the 10th House of Representatives.

He said that the committee with the help of stakeholders would establish the true status of the user charge and ensure accountability, compliance with the statutory obligations and ultimately that Nigeria and Nigeria roads would benefit from the funding mechanism clearly provided for in the law.

The chairman directed the NMDPRA to provide an estimate of the 5 per cent user charge on petrol and diesel since its enactment in 2007 and ensure that the law is no longer observed in the breach.

The FERMA Act 2007 provides for the user charge on the pump price of petrol and diesel, out of which 40 per cent will accrue to FERMA and 60 per cent will be utilised by the established state roads maintenance agencies. 

The ad-hoc committee which had earlier invited FERMA, NMDPRA and other stakeholders to the hearing, stated that the bad state of Nigerian roads had become a matter of deep concern to the country.

Also speaking at the hearing, the Minister of State for Works, Bello Goronyo, highlighted the inadequacy of the agency’s annual budget, stating that the situation had continued to reflect on the state of roads nationwide.

Goroyo pointed out that FERMA requires an estimated N880 billion annually to maintain optimal road conditions in the country.

According to him, budgetary allocations have consistently fallen short, with N76.3 billion in 2023, N103.3 billion in 2024 and  N168.9 billion budgeted for 2025 out of the N880 billion.

However, he stated that under the leadership of President Bola Tinubu, the ministry of works remains steadfast in delivering world-class infrastructure that fosters economic growth, strengthens connectivity and enhances the daily lives of citizens.

He said the ministry of works would ensure the 5 per cent user’s charge as enshrined in the FERMA Act, serve its intended purpose of building and maintaining roads that will empower the Nigerian people and drive economic prosperity.

The Chief Executive Officer of NMPDRA, Farouk Ahmed, who was represented, in his submission confirmed the non-implementation of the 5 per cent user’s charge due to the unavailability of the modalities for the collection of the allocated fund. He stated that the commission was ready to implement the enacted law once the modalities are put in place.

Also speaking, the Managing Director of FERMA, Dr. EmekaAgbasi, argued for the justification for the remittance of the charge to the agency, stating that the agency has been underfunded, with only the annual budgetary allocations which provides 20 per cent of FERMA’s financial requirement.

He added that the charge is a common and effective mechanism globally for funding of road infrastructure maintenance.

To fully realise the funds, Agbasi urged the committee to include clear and mandatory provisions for the collection, administration, and auditing of the charge, create a FERMA Road Fund Account, and ensure full enforcement of the existing FERMA amendment act.

He said: ‘’5 per cent user charge on petrol and diesel as outlined in the FERMA Act, 2007, remains a critical, yet underutilised policy tool for addressing Nigeria’s road infrastructure crises.’’