FG, NASS At War Over N1.2trn Fuel Subsidy

Wednesday 29 October 2014

FG, NASS At War Over N1.2trn Fuel Subsidy

The proposed N1.22 trillion budgetary allocation for petroleum subsidy in the 2015 budget appropriation is causing stir between the National Assembly and the presidency.

According to reports, the subsidy budget allocation has attracted industry criticism and calls for transparency in the current subsidy regime.

The chairman, House Committee on Petroleum (Downstream), Hon. Dakuku Peterside, advised government to thread the path of honour by bringing sanity into the subsidy regime, saying that, this time, the House would carry out a thorough examination of documents brought before it by the executive.

“Do you call that subsidy?” he asked. “You are the one calling it subsidy; better call what it is and let’s stop deceiving ourselves. As for, us we are waiting for the document to come to us. I think it is time to thoroughly interrogate this.”

Speaking about the Oil, Trading and Logistics exhibition (OTL) in Lagos, he said the petroleum products import would not end in the short term and also that the Nigerian petroleum industry was over regulated and not investment friendly.

According to him, the refineries are not working and licensed investors are not willing to put money on the table.

“The reality today is that the refineries are not producing in-country, in the short-term we must import. The local banks are not ready to offer long-term loans. Eighteen licences for new refineries were recently issued but the regulatory environment is bad,” he said.

“The pipeline security is also a huge challenge, piracy is ongoing. Government recently embarked on green field refinery project in Lagos, Bayelsa and Kogi. The idea is that government will have 40 percent equity in those refineries while the private sector will have 60 percent controlling shares but they are not showing up; the corruption in the downstream is so much.”

Peterside, however disclosed that the document would be laid on the floor of the House this week and members would be given the opportunity to study it, even as he expressed optimism that both the House and the Senate would ensure its passage before May 2015.