The federal government has said it will spend about N450 billion next year on fuel subsidy.
This is despite the commitment by the Nigerian National Petroleum Corporation (NNPC) to rehabilitate the country’s four refineries to stop importation of petroleum products.
A former NNPC chief and ex-petroleum minister, Ibe Kachikwu, had also pledged that Nigeria would end petrol importation by 2019. Mr Kachikwu was one of the ministers not reappointed by President Muhammadu Buhari when he named his new cabinet after his reelection.
The Minister for Finance, Budget and National Planning, Zainab Ahmed, announced the subsidy amount in Abuja at the public presentation of the 2020 budget details.
She said a provision of N450 billion has been made for ‘under-recovery’ of cost in respect of the importation of Premium Motor Spirit (PMS), popularly called petrol.
“A provision has been made in the budget for under-recovery for PMS (premium motor spirit) in the sum of N450 billion provided in the fiscal framework. It is under-recovery because it is a cost operation for the NNPC,” Mr Ahmed said.
The minister answered a question by the President of the Manufacturers Association of Nigeria (MAN), Mansur Ahmed, who wanted to know if the government has removed fuel subsidy from the budget.
Under-recovery is the term officials of the Buhari administration use for fuel subsidy, partly because the state-oil firm, NNPC, is now the sole importer of petrol.
A 2022 Target
Last month, the Group Managing Director of the NNPC, Mele Kyari, announced a programme to carry out the full rehabilitation of country’s four refineries in Port Harcourt, Warri and Kaduna.
Mr Kyari, who unfolded the schedule for the refineries’ repairs during a tour of the Port-Harcourt Refining and Petrochemical Company (PHRC), said the exercise is scheduled to commence in January next year.
He said the corporation was determined to ensure the refineries achieved optimum refining capacity by 2022.
This is not the first time the state owned corporation will be giving such assurances over the years.
“We will stick to the schedule. We will deliver this project by 2022. We will commence actual rehabilitation work in January next year.
“We will do everything possible between October and December this year to close out all necessary conditions for us to deliver on the project,” Mr Kyari had said.
Other budget highlights
During the presentation of the budget details, the minister also highlighted some of the key expenditures items captured in the Medium Term Expenditure Framework (MTEF), which were not included in the 2020 budget.
They included about N61 billion provided for the Presidential Power Initiative, and about N1.22 trillion for federally funded projects in the oil and gas sector to be undertaken by the NNPC on behalf of the federation.
She did not identify the projects.
The other provisions included about N272 billion as transfers to Tertiary Education Trust Fund (TETFUND) for infrastructure projects in tertiary institutions, and about N82.3 billion as transfer to the Nigeria Sovereign Wealth Investment (NSIA) for the Public-Private Partnership and Presidential Infrastructure Development Fund (PIDF).
The minister explained that these provisions were made in line with the commitment by President Muhammadu Buhari in his budget speech to ensure the government invested in critical infrastructure, human capital development and enabling institutions.
The institutions targeted included key job creating sectors of the economy, provision of incentives to the private sector to enhance their investment capacity to compliment the federal government development plans, policies and programmes in 2020.
For revenue, Mrs Ahmed disclosed that there were provisions for Strategic Revenue Growth Initiatives (SRGI) aimed at boosting revenue generation to meet targeted revenue-to-gross domestic product (GDP) ratio of 15 per cent.
Also, she said the SRGI would be implemented “with increased vigour to improve revenue collection and expenditure management during the year, as the government was determined to mobilise significant resources to invest in human capital development and critical infrastructure”.
“Some reforms will be tough, but they must be done to look at the facts and be frank with ourselves. However, we will engage the public sector in whatever we do, including any changes in taxes, with regards to rates or administration methods.”
Culled from Premium Times
