- Category: Business and Economy
- Published on Tuesday, 03 July 2012 18:47
- Written by Admin
- Hits: 230
MINISTER of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, told the Senate, yesterday, that the Federal Government spent a total of N2.19 trillion on fuel subsidy last year.
Okonjo-Iweala disclosed this when she appeared before the Senator Magnus Abe-led Senate Joint Committee on Petroleum (downstream and upstream), Finance and Appropriation, that is currently probing the fuel subsidy disbursement.
Meanwhile, chairman of the Senate Committee, Senator Magnus Abe, has declared the JP Morgan off-shore account operated by the Nigerian National Petroleum Corporation, NNPC, as illegal and unconstitutional.
Abe drew the attention of the officers to Sections 80 and 160 of the 1999 constitution (as amended), which made it mandatory that all revenues occruing to the Federal Government shall be remitted to the federation account maintained at the Central Bank of Nigeria, CBN.
Speaking further, the Finance Minister who noted that a total of N1.7 trillion was paid as arrears from the N2.19 trillion, stressed that the balance of N451 billion was expended on actual fuel subsidy during the year.
When the committee requested to know what the Federal Government would spend on fuel subsidy this year, the minister who told the committee that she could not make such projections now, explained, however, that it was only the Petroleum Products Pricing and Regulatory Agency, PPPRA, that deals with allocations to marketers that can give out such figure, adding that there was the need for government to work out a formula through which the Ministry of Finance will know the actual subsidy to be paid at any given time.
Abe had confronted the Minister of Finance and Coordinating Minister of the Economy, Dr. Okonjo-Iweala, and the new Group Managing Director of the NNPC, Mr. Andrew Yakubu, with the discovery of the off-shore account, and demanded to know if they were aware of its existence.
When they took their turn separately to explain, they told the Senators that they know as a fact that the NNPC operates an account for purposes of commercial transactions from sales made from crude oil.
According to Okonjo-Iweala, “I believe the NNPC runs an account, but I’m not specific now if it’s JP Morgan or not. At the beginning of the year, the Finance Ministry strives to get an idea of the quantity of crude oil likely to be produced, from where we get an estimate of what should be disbursed to the Federation Account.
“Since NNPC is involved in sale of crude oil outside, it is possible it has an account where such monies could be paid into before being moved to the Federation Account.”
The minister who noted that NNPC; Federal Inland Revenue Service, FIRS, and the Nigeria Customs Service were the three agencies of government responsible for the collection of revenues, said that since the corporation sells crude, it was allowed to transfer such proceeds to the CBN.
Abe after listening to the minister, thereafter, directed the minister to liaise with her counterpart in the Ministry of Petroleum Resources, Mrs. Diezani-Allison Madueke, as that will help discontinue the operations of the offshore account.
On why ships berth at the Lome ports
When asked on claims by international oil dealers that piracy and the non-dredging of Nigerian seaports were responsible for their ships to berth at the Lome ports, Okonjo-Iweala told the Senators that the issue of security on the nation’s waterways was being addressed by the Office of the National Security Adviser, in collaboration with the Nigerian Navy and other relevant agencies responsible for securing maritime borders.
No data on PMS consumed annually
At the public hearing, NNPC GMD, Yakubu revealed that the CBN was signatory to the contentious JP Morgan account, just as a former Executive Secretary of the PPPRA, Abiodun Ibikunle, disclosed that the agency did not have a scientific data of the amount of premium motor spirit, PMS, consumed annually in the country.
Ibikunle also told the Senators that the agency lacked the facility to reach trans-shipment points in Lome, the Togolese capital, where products are shipped from, adding that N600 million was released as subsidy fund in 2010.
The Senate has, therefore, summoned the Executive Director of Finance, NNPC, to appear before the committee today to further clarify on the accounts of the corporation. (Vanguard)