A fresh confusion involving trillions of naira spent on the infamous fuel subsidy emerged yesterday over the amount actually expended and the period covered by the payments.
Reports from a public hearing conducted by the Joint Senate Committee investigating the management of the fuel subsidy held yesterday quoted the Finance Minister Dr. Ngozi Okonjo-Iweala as telling the hearing that N2.19 trillion has so far been paid this year for fuel subsidy.
The minister was said to have given the breakdown of the payment to comprise N1.7 trillion arrears brought forward from 2011 and the subsidy payment between January and June this year which stands at N451 billion.
But these two figures amount to N2.151 trillion and not N2.19 trillion given by the minister.
This conflicting figures came even as a total of N1.3 trillion comprising the N888 billion already budgeted for subsidy payment for 2012 and the N451 billion of arrears for 2011 would be paid this year.
Therefore this suggests that in addition to the previous payments made on the subsidy, the federal government would actually spend fresh N1.3 trillion this year on the subsidy.
This comprises the N888 billion earmarked for the 2012 subsidy and the N451 billion carryover of the 2011 subsidy as claimed by the minister.
Soon after the correspondents had filed their reports an aide of the finance minister sent a text message correcting the submission of the minister as follows: “Urgent correction: What has been spent on subsidy for the whole of 2011 is N2.19 trillion comprising N1.7 trillion paid as at December 2011 and N451 billion arrears for last year paid this year. Contrary to what the report you may have got from the Senate today, the N2.19 trillion is not for this year but the whole of last year. Pls reflect without attribution. Many thanks.”
The request not to attribute the correction to the aide added a new dimension to the matter as it suggested that the aide was not sure or was not authorised to issue the correction. Both positions however do not clear the muddled figures.
She, however, did not state the total amount the country will pay as subsidy at the end of the year as Petroleum Products Price Regulatory Agency will handle products allocated to market.
She added “there is need for government to work out formula to enable the ministry know exactly what is to be paid at every point.”
I don’t know details of NNPC foreign account – Okonjo-Iweala
However, the minister of finance told the committee that she is not aware of the details of a crude account operated by the Nigerian National Petroleum Corporation, (NNPC), with American based bank, JP Morgan.
This was corroborated by the accountant general of the federation, Jonah Otunla and the director-general of Budget Office, Bright Okogwu who said they were not aware of the account details.
Responding to questions by the committee who described the account as unconstitutional, Okonjo-Iweala, said she is aware of JP Morgan account but could not state specifics on the account.
She further stated that the ministry is only aware of the revenue in the Federal Allocation Account which accrues from the Federal Inland Revenue Service (FIRS), the NNPC and the duties from Nigerian Customs Service (NCS).
“I know that since NNPC deals with marketing of petroleum products, it has external account and I also know that it has an account with JP Morgan but I don’t have the details. I am not aware of the specifics of the account.
“We rely on three main agencies to get money that is the FIRS, NNPC and the Customs. The agencies which give us money with estimates we set for them each month that is how we operate. We rely on them to remit monies. Minister of finance can’t go abroad to collect it. Every single month at FAAC we have a technical meeting to get the money.”
She, however, explained that the NNPC, being a commercial institution probably needs an account where payments are made into before they are transferred to the federation account.
The committee while stating that the illegal account was unveiled to them through the CBN however did not reveal the amount nor when the account was opened by the NNPC.
According to the committee chairman, Senator Magnus Abe, he said the operation of the account was unconstitutional as it runs contrary to section 81 and 84 as well as section 162 which mandates that all revenue accruing to the federal government should be domiciled in the Federation account in the Central Bank of Nigeria, CBN.
“The NNPC can’t have more powers than the federation. If the federation can’t have an international account, then who is the NNPC”
Abe, however stated that there was no justification for the operation of such account as whatever business practice should not alter the provisions of the constitution.
He further questioned why a middle man should be brought in to collect the federal government revenue stressing that all such transactions can be done by the CBN.
NNPC insists CBN is signatory to foreign account
Meanwhile, the Group Managing Director of the NNPC, Andrew Yakubu, disagreed with the CBN over who operates the account.
Reacting to the position of the CBN as quoted by committee that the NNPC operate the account, Yakubu, who admitted the existence of a crude account, said the CBN was a signatory to the account.
He was, however, mandated by the committee to return with the executive director finance tomorrow to throw more light on the operation of the account.
Meanwhile, huge revenue which would have accrued to Nigeria is been lost to Lome, Togo as foreign suppliers blamed insecurity at Nigerian ports owing to piracy, shallow ports and carbotage law for berthing at the neighbouring West African country.
The companies, Nimex, Trafigura and Vitol said they have to leave the Lagos ports and subsequently Cotonou ports because the attacks by pirates became unbearable.
They said the Togolese Navy provides them with adequate security that has ensured their operation off their shore.