Fuel was subsidised in 2011 to garner votes -Ngama

It has been revealed that the federal government’s subsidy of imported petroleum product was due to be revoked earlier in March 2011, but was sustained against budgetary provision as a bait for votes in the general elections that held in April.

Nigeria’s junior finance minister, Yerima Ngama made the disclosure on Thursday while answering questions at a senate investigative hearing on the management of the 2011 petroleum subsidy budget.

According to him, the administration's initial plan was to subsidise petroleum products only in first two months of 2011. However, he explained that due to the pressing need to win the election by the present government, the subsidy was sustained to keep the government popular through the elections.

“It was wrong timing,” the minister said.

In the 2011 budget, only N245 billion was appropriated for continued subsidy of the importation cost of petroleum products, however, so far, N1.46 trillion has been spent on the scheme, over shooting the legal budget by several N1.2 trillion, yet without recourse to a legislation of the National Assembly.

Irked by the outrageous expenditure on the subsidy, the senate embarked on an investigative hearing to determine the cause of the over expenditure.

Ngama explained to the senate that the initial budget was planned for the first two months of 2011 only, honestly “hoping that it will be suspended in March.”

“Strategically, it wasn’t expedient to remove the subsidy in March,” the Minister said.

He however said neither he nor the ministry was liable for breaking the 2011 appropriation by authorising the illegal expenditure of N1.2 trillion above the budgeted amount.

The investigative hearing has so far revealed horrible scams within the management of the petroleum subsidy funds and a dearth of plans by the federal government to adequately utilise the funds that will be generated from the removal of the subsidy on fuel.

An audit report of the management of the petroleum industry indicted the petroleum ministry, Nigeria National Petroleum Corporation and its auditors of unethical conducts in the management of Nigeria’s subsidy fees.

The KPMG report, which was commissioned by the finance ministry, revealed that the two auditors hired by the NNPC to verify volume imported claims of fuel importers – Akintola Williams Deliotte and Olusola Adekanola and Co – may have conspired with the importers, NNPC and the petroleum ministry to manipulate petrol importation quotes.

The KPMG, which is on the table of the finance minister, Ngozi-Okonjo Iweala, confirms that the auditors whom the finance ministry rely on to confirm the claims by importers of petroleum are involved in the day-to-day landing of products at the ports.