Nigeria’s 36 states insist on removal of fuel subsidy

A petrol station used to illustrate the story
A petrol station used to illustrate the story

Federal, states, local governments share N756 billion for June.

The 36 states of the federation on Tuesday declared that there was no going back on their demand for the Federal Government to put a stop to the removal of subsidy on petroleum products in the country.

The Chairman, Finance Commissioners Forum, Timothy Odaah, said extensive discussions on the issued continued during the Federation Accounts Allocation Committee, FAAC meeting, even as the report of its committee was still being awaited.

Mr. Odaah was speaking, just as the Minister of State for Finance, Bashir Yuguda, said Federal, States and Local Governments shared revenue allocation of about N756 billion from the Federation Account for June.

Mr. Yuguda told journalists at the end of the FAAC meeting that the shared amount comprised funds from statutory oil revenue, Subsidy Reinvestment and Empowerment Programme, SURE-P, excess non-oil revenue and Value Added Tax, VAT sources.

According to him, distributable statutory revenue for the month was N582.9 billion, while N35.5 billion was proposed for distribution under the Subsidy Reinvestment and Empowerment Programme, SURE-P.

An additional N71 billion, he said, came from the excess non- oil revenue proposed for distribution, with total revenue distributable for the current month, including Value Added Tax, VAT, of N66.4 billion, put at approximately N756 billion.

A breakdown of the revenue distribution showed that the Federal Government received N270.144 billion, representing 52.68 per cent; States, N137 billion, representing 26.72 per cent; and Local Governments received N105.6 billion, amounting to 20.60 per cent.

Mr. Yuguda said that about N57.9 billion, representing 13 per cent derivation revenue, was also shared among the nine oil producing states as derivation revenue.

On VAT, he said that the revenue collected for the month was about N66.4 billion as against the N65.4 billion distributed in May, representing an increase of N999 million.

Mr. Yuguda disclosed that the nation generated N784.9 billion as mineral and non-mineral revenue in June as against N582.9 billion budget expectation for the month, an excess of N201.9 billion.
He said that from the excess funds for the month, excess crude account got N50.35 billion, N45 billion to Domestic Excess Account and N35.55 billion for SURE-P.

“After deducting all this, we still had N71.05 billion, which will be taken into the Excess Non- Mineral Revenue Account,” he said.

“Mineral revenue collected in June was N517.3 billion, representing N10.1 billion higher than N507.2 billion realised in the preceding month. Non-mineral revenue collected in the month was N267.6 billion.”

The minister said that the non-mineral revenue collected in June dropped by N69.3 billion from N336.8 billion realized in May.

On the proposed removal of fuel subsidy, the Chairman, Finance Commissioners Forum, Timothy Odaah, said the forum had extensive discussion on it.

According to Mr. Odaah from the report received, there was a great improvement in non-oil revenue received for the month, which showed that Nigeria was becoming less dependent on oil.

“Likewise, the issue of subsidy removal came up again and we still stand on the removal of fuel subsidy, because it will be of much greater benefit to the states. The intention of the Federal Government is being defeated by its abuse by some people,” he said.

He said states were determined to ensure that the demand for total removal of fuel subsidy was pursued to its logical end, as the fuel subsidy regime as currently operated has been a fraud.

Mr. Odaah, who is the Commissioner of Finance for Ebonyi State, said that while the report of the 12-member committee on the review of subsidy was still being awaited, the current position of FAAC was that subsidy must be removed since the purpose for which it was established had been defeated.

“The issue of subsidy removal re-echoed today and it became an issue of discussion and the report of the committee set up three months ago is being awaited and we still stand on the removal of subsidy as it will be of much benefit to the states because what we have now is like robbing Peter to pay Paul.

“The purpose by which government set up subsidy is being defeated and so it should be based on consumption”, Mr. Odaah added.

Reflecting on the revenue generation trend, the Commissioner explained that there had been a tremendous improvement in non-oil revenues in the past few months, attributing it to increased reduction in the rate of oil theft.



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