FG Paid N2.9Tr as Subsidy in 2011 4 years ago 9

The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, Monday disclosed that the Federal Government has so far paid N2.19 trillion between 2011 and 2012 on fuel subsidy. She stated this during the last lap of the public hearing conducted by the joint Senate committee investigating the management of the fuel subsidy fund.

She said the breakdown comprised N1.7 trillion paid on subsidy claims in 2011, adding that arrears carried over from 2011, but paid between January and June 2012 stand at N451 billion. The minster however refused to give details of how much the Federal Government may likely pay at the end of the 2012 fiscal year. However, the minister denied knowledge of the details of the controversial JP Morgan account into which the Nigeria National Petroleum Corporation (NNPC) secretly remitted monies generated from crude oil exports.

The minister, who appeared before the Senate joint committee investigating the management of the fuel subsidy scheme, admitted that she was aware of an existing account operated by NNPC but she did not have the details of the JP Morgan account. Also speaking in the same vein, the Accountant General of the Federation, Mr.  Otunla, said he was unaware of the account and its details.

Chairman of the Senate investigating committee, Senator, Magnus Abe had earlier drawn the officials’ attention to the secret account, the operation of which he said, contravenes Section 80 (4) of the 1999 ConstitutionResponding to questions by the committee who described the account as unconstitutional, Okonjo-Iweala, said she was aware of JP Morgan account but could not provide specifics on the account.

She further stated that her ministry was only aware of the revenue in the Federation Account into which revenue accrues from the Federal Inland Revenue Service (FIRS), NNPC and the duties from Nigerian Customs Service, among other sources. “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.

“The 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 NNPC, being a commercial entity probably needs an account where payments are made before they are transferred to the Federation Account. The committee while stating that the illegal account was unveiled to them through the Central Bank of Nigeria (CBN), however, did not reveal the amount or when the account was opened by NNPC.

According to the committee chairman, Magnus Abe, he said the operation of the account was unconstitutional as it contravenes 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 CBN.

However, 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 the committee that the NNPC operates the account Yakubu, who admitted the existence of a crude account, said the CBN is a signatory to the account. He was, nonetheless, mandated by the committee to return with the NNPC Executive Director Finance tomorrow to throw more light on the operation of the account.

Meanwhile, huge revenues which would have accrued to Nigeria have been lost to Lome, Togo, as foreign suppliers have blamed insecurity at Nigerian ports owing to piracy, shallow ports and the Cabotage Act 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 shore Home Page

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