A Review of the Nigerian Energy Industry

Nigeria’s House of Reps reject fuel subsidy removal

Ben Agande

2 December 2011, Sweetcrude, ABUJA—The Nigerian House of Representatives, Thursday rejected President Goodluck Jonathan’s planned proposal to remove oil subsidy by January 2012.

The legislators rejected the proposal during the consideration of the report on the Fiscal Strategy Paper submitted to the National Assembly by President Jonathan.

They averred that the proposal was premature, just as they called on the President to source funds elsewhere to finance items for the deficit expected in the 2012 budget.

While considering the report of the Joint Committee on Finance, Appropriation, Legislative Budget and Research, National Planning and Economic Development, the members also tasked the President to be cautious in the implementation of its Public Private Partnership (PPP) policy.

They observed that rushed implementation of the PPP could lead government to abandon its social responsibilities to Nigerians.

The legislators held that PPP should be restricted to specialized areas where the private sector has comparative advantage and expertise to deliver results.

Besides, the House asked that the Federal Ministry of Finance should provide comprehensive details on capital projects to be funded through the PPP to the National Assembly before the submission of the 2012 budget.

Part of the demands made to the finance ministry also include provision of indicative envelopes for the various sectors, as part of the main report, to enable the National Assembly assess the level of alignment with top line investment priority areas as indicated in the first National Implementation Plan.

The House in the report approved daily crude oil production figures of 2.48mbpd, 2.55mbpd and 2.58mbpd for 2012, 2013 and 2014 respectively.

The recommendation on debt sustainability proposing N794 billion as domestic borrowing in 2012 as well as the provision for both external and domestic debt service in the MTTF were approved by the House.

They, however, kicked against the lumping together of all public debts noting that it should be stopped since it did not provide any meaningful information.

“Data should be disaggregated since specific information is required to determine the extent to which the foreign and domestic debt levels can accommodate the proposed federal budget deficit financing options. In the future, the Debt Management Office should provide an analysis of the impact of the private sector and measures to reduce domestic debt,” the adopted report said.

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