Clumsy arithmetic of the 2011 subsidy
She spoke at the resumed hearings into the management of fuel subsidy by the Senate Joint Committee on Petroleum (Downstream), Appropriation and Finance. The breakdown of the subsidy payment, according to the minister, includes N1.7 trillion paid as at last December and N451 billion arrears paid this year making a total of N2.19 trillion for […]
She spoke at the resumed hearings into the management of fuel subsidy by the Senate Joint Committee on Petroleum (Downstream), Appropriation and Finance. The breakdown of the subsidy payment, according to the minister, includes N1.7 trillion paid as at last December and N451 billion arrears paid this year making a total of N2.19 trillion for 2011 only.
A curious aspect of the entire exercise however was when the Senators asked what Nigeria was likely to pay as subsidy in 2012 in view of the minister’s access to past records. Dr. Okonjo-Iweala did not take offense but politely educated the Senators that “She did not know”. She went a step further by revealing to the Committee that she strongly believed that the Federal Government must as a matter of expediency work out a formula whereby the Ministry of Finance would know exactly the amount of subsidy to be paid at any particular time. Her suggestion to the federal government (or rather, her suggestion to her government) was coming 7 months after a state-wide protest on the vexed issue of phony subsidy.
It is on record that some Nigerians who are part-scholars and part-technology geeks identified the processes involved in the entire present fuel distribution and subsidy management scheme – and not just the formula for the amount of subsidy to be paid (shared) – as fundamentally flawed and would be willing to help the nation institute a modern, transparent, technology enabled system that can empower the Minister, her Ministry and Nigerians with the technological and administrative enablement to pervasively monitor each drop of fuel from the high seas to the bellies of our vehicles and equipment. They knew that modern science gives them the capacity to record actual consumption for days and weeks and then project future consumption based on this with sure-fire accuracy. But what do they know? Obviously, these Nigerians misread the minister’s intention.
It must of course be stated that when asked about the J.P. Morgan account, Dr. Okonjo-Iweala acknowledged that there is indeed a foreign “J. P. Morgan” account into which all the revenues of crude oil sales of the Federal Republic of Nigeria are paid by the NNPC but then she also honestly added that she does not know how NNPC operates this particular account WHEREIN all the revenues of crude oil sales of the Federal Republic of Nigeria WHENCE she serves as Coordinating Minister of the Economy are paid. Receipts from crude oil play a dominant role in Nigeria’s ECONOMY and account for about 90% of her gross earnings.
The NNPC denied managing the account and claimed that the CBN does. The CBN however also denied managing the account claiming NNPC does. Again, the particular account in question is the one into which all the revenues of crude oil sales of the Federal Republic of Nigeria are paid!
Olatunji Ariyomo is a chartered engineer and wrote this piece from Premium Times