Nigerian states want oil subsidy regime to end

Fuel-queue2

FILE PHOTO: Motorists queue to buy fuel in Lagos

Citing fraud and sharp practices in the implementation of the nearly N1 trillion oil subsidy regime in Nigeria, the Forum of Commissioners of Finance of the 36 states of the federation has voted that it should be stopped.

The Chairman of the forum, Mr. Timothy Odaah, told journalists shortly after this month’s Federation Account Allocation Committee’s meeting, that the resolution was passed following irregularities observed in the fuel subsidy regime.

The forum passed the resolution just as fuel scarcity that started last week spread in the Federal Capital Territory, with many motorists queuing for hours at filling stations.

The FAAC meeting, which was chaired by the Accountant-General of the Federation, Mr. Jonah Otunla, was convened to consider and approve the statutory allocations for February.

•Motorists queue to buy fuel in Lagos
•Motorists queue to buy fuel in Lagos

Odaah, who is also the Commissioner of Finance, Ebonyi State, said the resolution on the fuel subsidy regime would be sent to the Nigerian Governors’ Forum for transmission to President Goodluck Jonathan.

He described the payment of fuel subsidy as a scam against some states, especially the less industrialised ones, as it had made “the rich to become richer, while the poor are becoming poorer.”

He argued that if Nigerians had not protested against the removal of fuel subsidy in January 2012, most states would have experienced significant level of development by now.

The Federal Government has a budget of N971.1bn for fuel subsidy payment in the 2014 fiscal year, same as in 2013.

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Odaah, said, “We looked at subsidy on oil as more or less a solution worse than the problem it is meant to solve.

“Looking at it presently, you will discover that it is not solving the problem, which it is meant to solve. In the first place, the NLC (Nigeria Labour Congress) and the majority of the Nigerian populace appear to have been deceived into clamouring for subsidy.

“It is a system that robs Peter to pay Paul by making the rich to grow richer and the poor to go poorer.

“There are some states that are fully industrialised and you use this subsidy in that particular place and the people who benefit more are those from the states that are industrialised.”

Odaah added, “The fuel consumption of those industries uses more of the fuel subsidy unlike the states that are under-industrialised.

“So, what we are advocating is that the subsidy be removed so that every state or any member of the federating unit sharing from FAAC will take his own money, then decide to use it or grant subsidy in a level that it will be able to afford.”

The forum also accused oil marketers of taking advantage of the subsidy regime to engage in sharp practices, noting that the payment of subsidy was exerting immense pressure on the Excess Crude Account.

.Reported by Punch

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