FG must justify fresh N3tn vote, others for fuel subsidy – Senate

Leke Baiyewu and Okechukwu Nnodim

31 January 2022

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he Senate has said the Federal Government will have to justify the fresh demand for N3tn for the extension of the subsidy on petrol  before it is approved by the National Assembly.

The Chairman of the Senate Committee on Media and Public Affairs, Ajibola Basiru, made this known against the backdrop of the controversy surrounding the actual volume of petrol, which Nigeria consumed daily.

The government is billed to present executive bills to the parliament to amend the 2022 Appropriation Act and the Petroleum Industry Act, as part of the move to extend the subsidy regime, following the protests that greeted its planned removal.

Already, the House of Representatives, last week, resolved to investigate the correct daily consumption volume and the actual state of the nation’s four refineries. The Speaker, Femi Gbajabiamila, had set up two ad hoc committees to carry out the probes separately within six and eight weeks, respectively.

Speaking to one of  our correspondents on Sunday, the Senate’s spokesman stated that whatever the executive proposed would not enjoy automatic approval.

When asked if the Senate would determine the actual volume of products consumed daily before approving the coming requests, Basiru said, “Every request made to the National Assembly will be scrutinised by the relevant committees before we take a decision.

“We will scrutinise all the requests and see whether they are justifiable or not, in line with our constitutional mandate and oversight function.”

When asked if it would not be automatic for the National Assembly to approve the requests, Basiru said, “It is not automatic, of course! We will scrutinise whatever they bring and see whether they are justifiable.”

Chairman of the ad hoc committee set up by the House to determine the actual petrol consumption volume, Abdulkadir Abdullahi, said the panel would commence work this week.

Following the Federal Government’s decision to extend payment subsidy on petroleum products, as part of the implementation of the Petroleum Industry Act to deregulate the downstream sector, the Nigerian National Petroleum Corporation Limited has presented a bill of N3tn to the Federal Executive Council as a requirement for 2022.

The Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, on Wednesday, disclosed that the FEC meeting presided over by the President, Major General Muhammadu Buhari (retd.), considered the request to provide additional funding for the government to meet incremental fuel subsidy payment in the 2022 Appropriation Act.

Ahmed noted that only N44bn is presently available in the 2022 budget meant to accommodate subsidies from January to June.

The minister also explained that with the harsh economic realities on the ground and the dearth of structures to support subsidy removal, the NNPC requested  N3tn from the Ministry of Finance for 2022.

PENGASSAN backs petrol consumption probe, FG yet to begin PIA amendment

On its part, the Petroleum and Natural Gas Senior Staff Association of Nigeria on Sunday said it would welcome any probe by the National Assembly that would ensure transparency in the downstream oil and gas sector.

It disclosed this as senior officials at the Federal Ministry of Petroleum Resources and the Nigerian National Petroleum Company Limited stated that the government had yet to start any amendment on the sections of the Petroleum Industry Act that touched on petrol subsidy.

They told one of our correspondents that the matter would have to be presented to the Federal Executive Council before such an amendment would be implemented, adding that work would, however, begin on the issue soon.

“It has to be tabled before the President and the Federal Executive Council before the amendment is to be implemented. But a decision has not been taken on the key sections yet,” an official at FMPR, who pleaded not to be named due to lack of authorisation to speak, stated.

The source added, “This is because there are actually two sections that are to be looked into critically, Section 64(M) and Section 317 Sub-Section 6 of the Petroleum Industry Act.”

Also speaking on the matter, an official at NNPC said, “There are basically two sections that they are going to look at that directly touch on petrol subsidy. But a decision has not been taken on which one is going to be amended or removed or added.

“So nothing has been done at the moment but I know they are going to visit it shortly. Right now no decision has been taken on the modality of carrying out this task.”

Section 64 of the PIA talked about the objectives of NNPC Limited, among which include that the firm would carry out petroleum operations on a commercial basis, comparable to private companies in NIgeria carrying out similar activities.

Such activities include exemption to Public Procurement Act, Fiscal Responsibility Act and Treasury Single Account, among others.

Section 317 Sub-section 6 of the PIA stated that “From the effective date, the government on behalf of the federation may request the services of NNPC Limited as supplier of last resort to ensure adequate supply and distribution of Premium Motor Spirit for a period not exceeding six months and all associated costs shall be for the account of the federation.”

On whether oil workers would support the probe by the National Assembly as touching petrol consumption in Nigeria, the General Secretary, PENGASSAN, Lumumba Okugbawa, told our correspondent that the association would back whatever would bring transparency in the petrol supply business.

He said, “Any action that will help bring transparency in the oil and gas (sector) will be a welcome development

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