The Revenue Mobilization Allocation and Fiscal Commission (RMAFC) has expressed its support for the fuel subsidy removal by President Bola Ahmed Tinubu during his inaugural address, describing the fiscal regime as a major challenge to the nation’s economic growth and development over the years.
The commission’s Chairman, Mr. Mohammed Bello Shehu, in a statement on Thursday while endorsing the fiscal measure of the new administration recalled that the Commission had consistently expressed its position on subsidy removal the administration of former President Olusegun Obasanjo.
He maintained the commission’s position on the fuel subsidy regime was premised on the fact that the continued payment of huge amounts to a privileged few in the name of subsidy was a major drain on the nation’s scarce resources.
According to him, this is especially true as the Nigeria National Petroleum Company Limited (NNPCL), one of the major sources of revenue to the Federation Account, has since stopped contributing to the account on the basis of the fuel subsidy payment, which is characterized by opaqueness and other ambiguities.
The RMAFC boss described the removal of fuel subsidy by the President as due to the non-budgetary provision for subsidy as a master stroke that broke the jinx, stressing that it is the appropriate step in the right direction.
Shehu explained: “The country can no longer sustain fuel subsidies whose demerits far outweigh its benefits to the citizenry. It is saddening to note that since 1st January, 2022 to date, the Nigeria National Petroleum Company Limited (NNPCL) has not been contributing to the Federation Account due to the claimed subsidy payments.
“The total amount withheld by the NNPCL as claimed subsidies for this period amounted to N8,480,204,553,608.13 as reported by the Office of the Accountant General of the Federation (OAGF) which is yet to be reconciled by the RMAFC, OAGF, and NNPCL”, the RMAFC’s chairman added.
According to him, a situation whereby the records of subsidy transactions are not transparent and crude oil prices are being determined globally, it will be unwise to sustain the phantom payments of subsidy at the detriment of other critical sectors of the economy thus making its sustainability difficult for the Government.
He clarified that the removal of fuel subsidies will eliminate the alleged uncertainty surrounding the subsidy regime just as it will free funds for the execution of critical national development and human capital enhancement projects such as the provision of an affordable transport system, Investment in the Education Sector, improvement in Health care and infrastructural development, and resuscitation of domestic Refineries to eliminate dependence on imported fuel, amongst other key sectors.
Shehu said that he was optimistic that when the Dangote refinery comes on stream, the fuel scarcity challenge that had been a major problem for businesses and Nigerians over the past year would be over with the attendant positive impact on the economy.
The RMAFC’s chairman urged the new administration to work out strategies that would cushion the attendant effects of the new policy adding that deterrent measures should also be taken to punish economic saboteurs in the petroleum industry’s downstream subsector in accordance with the extant laws of the federation.
