2011 subsidy claims to hit N2tn – Reps’ panel

The House of Representatives Ad-Hoc Committee on Subsidy Regime said on Thursday that total subsidy claims to be paid by the Federal Government on imported fuel in 2011 might hit “over N2trillion.”

The committee stated this in the light of fresh revelations that many marketers had outstanding claims to be paid by government running into billions of naira.

Already, the Minister of Finance, Mrs. Ngozi Okonjo-Iweala, and the Central Bank of Nigeria had given the committee two conflicting figures on the subsidy claims for 2011.

While the minister said the total amount paid as at December 2011 was N1.4tn, the apex bank insisted that the “actual” payment was N1.7tn.

But the committee observed in Abuja on Thursday that the N1.7tn was still a far cry from the expenditure government incurred on fuel subsidy in 2011.

The Chairman of the committee, Mr. Farouk Lawan, said more marketers had appeared to testify that the government owed them money for products they imported.

He said 100 marketers were awarded contracts to import fuel in 2011, rising from about 49 in 2010.

Oando Plc for example, was paid N120bn subsidy in 2011, but told the committee that it was still owed over N4bn.

Lawan noted that the outstanding claims were alarming. He said the committee must establish how subsidy payments jumped from around N620bn in 2010 to a “situation where it rapidly to rose in 2011 and we are expecting over N2tn.”

He added, “Over 100 companies participated in the Petroleum Support Fund in 2011.

“What we have is that many of them still have outstanding payments.

The committee made the observations when it heard the testimony of the immediate Executive Secretary of the PPPRA, Mr. Goody Egbuji, who admitted to have supervised the transactions that took place in the second and third quarters of the year.

However, he claimed that the PPPRA Board had already increased margins for marketers before he assumed duties in February 2011 and had little choice than implement what he met on ground.

He said one of the first things he noticed was the huge “subsidy burden” that government needed to address.

According to him, the Presidency was informed of the development and a series of consultations were made on how to tackle the problem.

Egbuji admitted that “sharp practices and manipulations” could not be ruled out in the industry but he absolved the PPPRA of any role in encouraging fraud.

“We have our rules and they are strict rules,” he said.

Meanwhile, Lagos-based lawyer and human rights activist, Mr. Femi Falana, has called on the House not to sweep the revelations at the committee’s hearing under the carpet.

Falana, who appeared before the committee on Thursday, said from the evidence before the committee and admission by agencies of government, there was proof of large-scale “corruption” in the management of the subsidy regime.