Published On: Thu, Mar 13th, 2014

Forum Of States Finance Commissioners Call For Removal Of Petroleum Subsidy

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Oil rig workers

By Benjamin Umuteme

The Forum of Commissioners of Finance of the 36 States of the Federation on Thursday called for the removal of fuel subsidy saying it does not reflect on the living condition of Nigerians.

The Chairman of the Forum, Mr. Timothy Odah, while fielding questions from journalists on Thursday in Abuja said the subsidy on oil as a solution worse than the problem itself adding that many Nigerians have been decieved into clamouring for subsidy.

“For instance, you discover that it is the average poor man that suffers. Most of the transporters are not applying any form of subsidy in what they charge….It is like robbing Peter to pay Paul, making the rich to grow richer and the poor to grow poor,” Mr. Odaah said.

The Ebonyi State Finance Commissioner insisted that because subsidy is eating into the nation’s crude reserve, it has affected the resources of many States.

“What we have today is $3.45billion and it is because certain measures were followed otherwise by the end of the month of April, you will be discovering a situation where States allocation will have been deducted in order to pay subsidy.

Mr. Odaah said that the Central Bank’s directive on the Credit Reserve Ratio (CRR) is a deliberate creation of artificial scarcity.

While decrying the situation where the three tiers of government find it difficult to borrow money because the coupon rate has gone up, Mr. Odaah likened the Apex Bank’s decision as “artificial scarcity created by a manipulated means”.

The Central Bank of Nigeria (CBN) had increased the CRR to 75 percent.

He therefore called for a reduction of the CRR as the cost of funds is going so high that the states can no longer cope.

Meanwhile, the three tiers of government shared N641.299billion for the month of February.

The amount is higher than the N629.128billion distributed in January by N12.171billion.

For the month of February, the Federal Government got N247.533billion representing 52.68 percent. States got N125.552billion which is 26.72 percent. While the Local Governments went home with N96.795billion which is 20.60 percent. Furthermore, 13 percent derivation revenue distributed to the three tiers of government was N56.384billion bringing the distributable revenue to N526.265billion.

Briefing journalists after the FAAC meeting, Accountant General of the Federation, Mr. Jonah Otunla noted that the increase revenue was boosted by “an exceptional payment of N82billion by Nigerian Petroleum Development Company (NPDC).”

“The distributed Statutory Revenue for the month is N531.133billion. The sum of N7.617billion refunded by NNPC is also distributed. In addition, the sum of N35.549billion is proposed for distributed for distribution under the SURE-P Programme.”

N66.801billion was distributed for Value Added Tax (VAT) and N531.332billion was distributed as statutory transfer. However, there was no argumentation for the month.

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