The finance minister said only N443 billion is presently available in the 2022 Budget for subsidy from January to June.
The Nigerian National Petroleum Company (NNPC) has requested a total of N3 trillion from the federal government to fund fuel subsidy in 2022.
The Minister of Finance and National Planning, Zainab Ahmed, disclosed this while briefing State House correspondents after the weekly Federal Executive Council (FEC) meeting in Abuja on Wednesday.
The federal government had on Monday suspended its plan to remove fuel subsidy.
Mrs Ahmed said about N3 trillion would now be required to continue paying for the subsidy.
“We also presented to Council today a request for Council’s consideration to make additional funding provisions to enable us to meet incremental fuel subsidy request in the 2022 budget,” the minister said.
“You will recall that in the 2022 budget as appropriated, we have made a provision of N443 billion for a subsidy for January to June.
“Having taken into account the current realities, increased hardship in the population, heightened inflation, and also that the measures that needed to be taken to enable a smoother exit from the fuel subsidy are not yet in place, it was agreed by Council that it is desirable to exit fuel subsidy.
“The Nigerian National Petroleum Company (NNPC) has presented to the ministry a request for N3 trillion as fuel subsidy for 2022. What this means is that we have to make an incremental provision of N2.557 trillion to be able to meet the subsidy requirement, which is averaging about N270 billion per month.
“In 2021, the actual under-recovery that has been charged to the federation was N1.2 trillion, but in 2022, because of increased crude oil price per barrel in the global market, now at $80 per barrel and also because an NNPC’s assessment is that the country is consuming 65.7 million litres per day, now we’ll end up with the incremental cost of N3 trillion in 2022.”
The minister said the council agreed with the view of the state governors, that there was a need to scale down on the (N3 trillion) size.
She said: “So even as the government is not immediately removing the fuel subsidy, we have to make sure that what the nation is incurring is efficient, and that it is a real cost that has been consumed by the country.
“How we fund it? So we’ll have to reduce it from that N3 trillion and that is one. Secondly, we have been running reconciliations with NNPC to reduce the cost.
“But also we have several reconciliations with the NNPC and the NNPC itself owes in some cases, government.
“So, we want to be able to settle some of the subsidy costs through this reconciliation process.
“So, when we’re done with that, whatever is left that we’re not able to apply to what an NNPC is owing the Federation will not be increasing the deficit. And that means increased domestic borrowing.”
Approvals
FEC also approved a request for amendment of the 2022 appropriation batch to be transmitted to the National Assembly.
According to Mrs Ahmed, part of the requests of the executive in the proposed 2022 appropriation amendment is for clauses 10 and 11 to be repealed because they contravene provisions of the fiscal responsibility and finance Act 2021.
She said: “The memo we presented to council today has to do with a request for approval of the 2022 Appropriation Amendment.
“If you recall, when the President signed the 2022 Appropriation into law on the Dec. 31, he had raised some concerns in some of the provisions in the budget and had indicated that he will be submitting an amendment proposal to the National Assembly for them to effect improvements in what has been done to the budget.
“So today, council took that amendment proposal and I just want to report that part of the requests that council has approved today is for the National Assembly to repeal clauses 10 and 11.
“Clause 10 is referring to a provision that has been made that will enable the EFCC and NFIU be able to take 10 per cent of whatever collections that they recover.
“We’re asking for that to be repealed because this is in direct contrast to the Acts of these two agencies and also, it is in contravention of the Fiscal Responsibility Act and the Finance Act 2021.
“Clause 11, on the other hand, is a provision that has been made that says that the Nigeria embassies and missions are now authorised by this Appropriation Act to expend funds allocated to them under Capital Components without the need to seek approval of the Federal Ministry of Foreign Affairs.
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“This again, in a view, and council agreed, is inconsistent with financial regulations and also inconsistent with the provisions of the Public Procurement Act. So, we are asking for this to be repealed.”
Mrs Ahmed also disclosed that the council approved the ratification of the Customs Mutual Administrative Assistance Agreement between South Africa and Nigeria.
“That memo has to do with the confirmation of ratification of the Customs Mutual Administrative Assistance Agreement between South Africa and Nigeria.
“The importance of this for us is, cooperation between Nigeria and South Africa, as it has become even more important now with the Africa Continental Free Trade Agreement.
“It will also help to increase trade relations between the two countries and facilitate exchange of information as well as strengthen our bi-national cooperation,” she maintained.
The meeting of the council, presided over by President Muhammadu Buhari, on Wednesday in Abuja, also approved N52.8 billion for the completion of three roads across the country.
The President’s Senior Special Assistant on Media and Publicity, Garba Shehu, who attended the briefing, said the council approved the N52.8 billion for the completion of three road projects across the country
Speaking on behalf of the Minister of Works and Housing, Babatunde Fashola, Mr Shehu listed the benefiting states to include Akwa Ibom, Abia, Imo, Kwara and Cross River.
He disclosed that 11 other contracts were also approved, across the six geo-political zones of the country.
“He (Fashola) presented a request for the 15 highway projects, including roads and bridges all of which were approved but I will just give details of two or three of the roads that he got approval for.
“One of which was the award of contract for the construction of phase II of Ikot-Ekpene border, Aba to Owerri dualisation road project at the cost of N40, 157,000 000, with a completion period of 30 months.
“Another project for which he got approval is for the construction of the Offa bypass road in Offa Local Government Area of Kwara, for N4, 335, 000, 000 and is due for completion in 12 months.
“Another one is the revised estimated cost for the rehabilitation of the Alesi-Ugep road section in Cross River. The initial cost was N11.221 billion but the cost has now gone up to N14.740 billion with an additional completion period of six months. Eleven other roads are spread across various geo-political regions of the country,” he said.
On his part, the Minister of the Federal Capital Territory (FCT), Mohammed Bello, said the council approved N5.4 billion for the construction of a road in Bwari Area Council of the FCT.
“Today, I presented one memo at the Federal Executive Council meeting in respect of the contract for the completion of the road called; Mpape-Galuyi-Shere within the Federal Capital Territory, in Bwari Area Council at a total cost of N5, 454, 536, 230.67 only, to be completed within 18 months.”
The minister said the road had been under construction for some time but the contract was terminated when it was realised that the contractor could not perform and it was re-awarded to a new contractor.
The Minister of Communications and Digital Economy, Isa Pantami, said the council approved the Nigerian Communication Commission for the deployment of Revenue Assurance Solution (RAS) to block leakages in the telecommunication industry particularly as it applied to annual operative levies.
(NAN)