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Fuel subsidy: FG to spend N971bn in 2013

By on September 25, 2013

The Federal Government has said it will spend a total of N971bn to subsidise petroleum product consumption this year.

The amount is, however, N21bn higher than what was expended on fuel subsidy last year.

The government announced this on Monday as it released fresh N46.76bn for the payment of subsidy claims to 30 oil marketers.

The amount brings the total payments made under the fuel subsidy regime in the 2013 fiscal period to N287.35bn.

The Minister of Finance, Dr. Ngozi Okonjo-Iweala, confirmed the payment in a statement issued by her Special Adviser (Communications), Mr. Paul Nwabuikwu.

She said, “In 2011, there was a huge public outcry. As a result, this administration has worked hard to clean up the process of subsidy payments. In response, the ministry set up the Aig-Imoukhuede committee, which investigated the subsidy payments. The committee was later elevated to a presidential committee by Mr. President.

“We also hired new auditors and we put in place different checks and balances. As a result, last year, we brought the subsidy payment down to about N950bn, and we expect that this year, we will pay about N971bn.

“I believe this is a huge achievement for which the Jonathan administration deserves some credit, something that should make Nigerians proud of their government.”

According to the statement, 11 oil marketers were paid N17.29bn subsidy for petrol imported into the country in April, while the remaining 19 were paid N29.46bn for May imports.

Okonjo-Iweala said, “In furtherance of President Goodluck Jonathan administration’s commitment to transparency and accountability in the management of fuel subsidy payments, the Federal Ministry of Finance has released the sum of N46.764bn as the latest payment to oil marketers, whose claims have successfully gone through the verification process.

“This means that, so far in 2013, a total of N287.351bn has been paid in verified claims to verified marketers.”

She said the prudent management of the subsidy regime had enabled the Federal Government to reduced public spending on petroleum product subsidy from N2.2tn in 2011 to N971bn last year.

This, she added, represented a reduction of about N1.2tn or 56 per cent.

The statement also quoted Okonjo-Iweala to have said that the Federal Government would continue to block loopholes in the fuel subsidy regime, adding that only marketers with genuine claims would be paid.

Some of the marketers that got their subsidy claims are AITEO Energy Resources Limited, Conoil Plc, DEE Jones Petroleum and Gas Limited, Forte Oil Plc, Gulf Treasures Limited, Integrated Oil and Gas Limited, Mobil Oil Nigeria Plc and NIPCO Plc.