Total removal of subsidy appears imminent on states’ backing

Total removal of oil subsidy appears to be looming as states of the federation on Thursday moved a unanimous motion against government continuous commitment of monies for subsidy, which they called a “sham”, benefiting only the rich.

The states expressed their disgust with oil subsidy implementation through their commissioners of finance at the Federation Accounts Allocation Committee (FAAC) meeting in Abuja, saying they stand ready to communicate their position to Mr. President as quickly as possible.

Briefing on the outcome of the meeting, Jonah Otunla, accountant general of the federation (AGF), told journalists that subsidy implementation was one of the critical matters considered and that FAAC members expressed opinions and took a resolution that the issue should be reviewed.

Otunla said a 12-man committee, comprising six members from the finance commissioners’ forum and six from the accountants general’s office, have been set up to review the impact of subsidy in the federation account. He said the committee would report back to them at their next meeting on April 14 and 15.

“We will make our opinion known in the nearest future”, he told reporters after the FAAC meeting where a total of N641.299 billion was shared among the three tiers of government for February allocation.

Meanwhile, government revenue rose N125.75 billion to N666.745 billion in February, helped by N82 billion “exceptional payment” by the Nigerian Petroleum Development Company (NPDC).

This was despite drop in oil production coming from shutdown of some terminals due to repair works, pipeline leaks and fire outbreak.

The accountant general said the sum comprised N569.136 billion from mineral revenue and N97.609 accruing from non-mineral revenue sources.

But gross revenue from Value Added Tax (VAT) dropped by N15.476 billion to N66.801 billion in February from N82.277 billion received in January.

The accountant general said following the increase in revenue, a special $1 billion was transferred to the Excess Crude Account (ECA), bringing the total in the ECA to $3.456 billion.

He disclosed that the N82 billion payment from NDPC was from arrears they owe the federation accounts.

He said the N641.299 billion total distributable figure include N598. 133 billion from both statutory and VAT revenue sources which was N12.171 billion higher than N585.962 billion shared for January.

Also shared yesterday at the FAAC meeting was N7.617 billion refunded by the Nigerian National Petroleum Corporation (NNPC). N35.549 billion was also shared under the Subsidy Re-Investment Programme (SURE-P), the AGF stated.

Also briefing on the outcome of the FAAC meeting, Timothy Odaah, chairman States’ Commissioners Forum, confirmed their disgust over payments for oil subsidy.

He said their view is that oil subsidy had become more or less “like a solution worse than the problem it intends to solve.”

“Our position is that there are people who are eating on the subsidy to the disadvantages of others. It is because of that we passed a resolution and that had been the opinion of the forum of finance commissioners that the president should review, reconsider the position of this subsidy and remove it”, he stated.

Odaah also noted that the Nigerian Labour Congress (NLC) and majority of Nigerians appear to have been deceived into clamouring for the subsidy when government attempted to completely remove it in 2012.


About Eze Chuks

Eze Chucks is an experienced media practitioner. He has worked for several news organisation.He has pioneered many online news website as an editor . He holds a B.Sc Economics degree and a masters degree

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