Tuesday, 20 December 2011

Fuel subsidy to go in April

Owing to the high political temperature generated from the decision to remove oil subsidy, the Federal Government may have pushed the planned removal from January to April 2012. National Assembly sources told Daily Sun that the decision to shift the new take-off date to April was based on “inconclusive consultations” across all the sectors of the economy and politicians.

Months of intensive lobby by the Presidency for the National Assembly (NASS) to endorse the removal, beginning from the 2012 fiscal year ran into troubled waters.
President Goodluck Jonathan may be at the crossroads as an intensive lobby of the leadership of the National Assembly and some key committee chairmen has failed, for now.

Federal lawmakers have, so far, refused to endorse his proposal.
Besides, three Senate standing committees, mandated to consider the President’s proposal to the National Assembly on the removal, have rejected the move in the report submitted to the whole house two weeks ago.
The President presented estimates of N4.749 trillion Appropriation Bill to a joint session of the National Assembly on December 13 without any mention of the oil subsidy, which the government claimed that has so far gulped N1.5 trillion as at September this year.
Rather, in his budget speech, the President canvassed liberalization of the downstream sector much in line with that done for the communications sector.

“My administration is pressing forward with key structural reforms. We are implementing the privatization of the power sector based on the Power Roadmap which I unveiled last year.
“We believe that the power sector can benefit from liberalization and privatization by attracting investors in the same manner as the telecommunications sector has done. In the same vein, government will come up with policies to encourage investment in the downstream sector through liberalization so as to create jobs for our people,” the President had said then.
The National Assembly is still unimpressed.

This plea for understanding is, however, not sailing through in the federal legislature as renewed lobby of the lawmakers is not yielding any positive result. The move has even divided the NASS leadership as two camps have emerged.
Daily Sun checks on Monday revealed that even the two chambers are polarized along similar lines.

Sources close to the leadership told Daily Sun that the three committees, which worked on the 2012-2015 Medium Term Fiscal Framework (MTFF) and Fiscal Strategy Paper (FSP), warned against removal of fuel subsidy.
Some members of the Senate Committees on Finance, National Planning and Appropriation, which worked on the document, actually recommended that the Presidency should forget removal of subsidy.

The Senate has yet to debate the committees’ recommendations on the MTFF which was submitted two weeks ago.
Another National Assembly source recounted how the leadership of the legislature pleaded with members to show understanding with the President and not to resort to ‘unparliamentary behaviour’ during the budget presentation.
“We know what it took us to plead with our members to show understanding with the President before the budget presentation could sail through without any hitch.

“Right now, there is no consensus on the removal of the subsidy. Although the report of the MTFF has been submitted, the recommendation of the joint committees is that subsidy must remain while the leadership is also divided on how to go forward on the issue,” the source stated.

Meanwhile, the Presidency may not really need the approval of the National Assembly on subsidy removal as funds are taken directly from the Consolidated Revenue Fund (CRF).
Reliable sources told Daily Sun that consultations, particularly with the National Assembly on removal of oil subsidy, are just to prevent any ‘political backlash’ that may arise from such move.

“Annual allocation for oil subsidy was removed from annual budgets submitted to the National Assembly in 2004 and taken directly from the CRF, but the proviso is that the President has to first write to the National Assembly, seeking permission to take the money which can only be done after approval has been given.

“Right now, the President has not sent in any request and he needn’t have put the allocation for oil subsidy in his budget speech. That was why he was silent on it during the budget presentation last week,” a lawmaker said yesterday.
When contacted on telephone on Monday, Senate Leader Victor Ndoma-Egba , bemoaned the time constraint, but confirmed that the chamber would have on its Order Paper, the 2012 budget, the BPE probe report and the MTFF.
He declined to confirm whether the chamber would be able to discuss all the items on the paper.

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