FG to resume subsidy payment in July

FG to resume subsidy payment in July

The Federal Government on Tuesday said it would resume the payment of fuel subsidy next month.

The Minister of State for Finance, Dr. Yerima Ngama, confirmed this in Ibadan shortly after the Federation Accounts Allocation Committee meeting ended.

In a bid to ensure prudent management of the fuel subsidy budget, the government had two months ago stopped further payments to the oil marketers.

While N232bn was budgeted for the payment of subsidy arrears in the 2012 budget, a whopping N451bn had so far been paid as arrears to oil marketers for 2011 alone.

The development had made the Minister of Finance, Dr. Ngozi Okonjo-Iweala, to constitute a committee led by the Group Managing Director, Access Bank Plc, Mr. AigbojeAig-Imoukhuede, to verify subsidy arrears paid to oil marketers.

But Ngama said the committee had concluded its assignments and would submit its report to the Federal Government before the end of this week.

He said apart from the N451bn paid to oil marketers, additional N50bn was recently released, thus bringing the subsidy bill for this year to N501bn.

This implies that out of the N888bn set aside for subsidy, only N387bn is left for spending under the 2012 budget.

He said, “In the month of May, just like April, we didn’t pay any amount for subsidy. This is because we stopped the payment of fuel subsidy because we felt there was a need to carry out a reconciliation of the payments.

“I am glad to inform you that the committee that was asked to do that assignment has completed its work and the report will be sent to the Federal Government. As this committee submits its report; it, therefore, means that the ministry will from next month resume the payment of subsidies to oil marketers.”

Asked how much had so far been spent on subsidy this year, Ngama said,”N451bn has been paid and additional N50bn was last month released before the suspension of payment.”

On the Federation Account, the minister said the gross revenue declined by N46.87bn from N633.79bn received in April to N586.92bn in the month of May.

He attributed the decrease to a drop in crude oil export for the month, which resulted from shutdowns and disruptions caused by maintenance works at various oil terminals.

He put the distributable statutory allocation for the month at N461.67bn, indicating an increase of N20.5bn or 4.2 per cent when compared to that of April.

Of this amount, the Federal Government got N218.24bn or 52.68 per cent; the 36 states will share N110.69bn or 26.72 per cent; while the 774 local governments will share N85.34bn.

Similarly, N47.39bn will be shared to the nine oil producing states based on the 13 per cent principle of derivation.

In addition, Ngama said N57.68bn was shared as Value Added Tax revenue.

Of this amount, N8.65bn or 15 per cent is expected to go to the Federal Government; the states will share N28,84bn or 50 per cent; while local government councils will share N20.18bn or 35 per cent.

He also said that N35.54bn was proposed for sharing under the Subsidy Re-investment and Empowerment Programme.

The minister said N86.39bn was transferred to the Excess Crude Account, bringing its new balance to $5.3bn.


Source: Naija.ng

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