A Review of the Nigerian Energy Industry

SURE-P: Fuel price increase generates N71bn in 3 months

Omoh Gabriel

04 September 2012, Sweetcrude, LAGOS – THE three tiers of government in Nigeria earned a total of N71.10 billion from the increase in fuel pump price in January between April and June 2012.

The sum was the amount distributed as the Subsidy Re-Investment and Empowerment Programme, SURE-P, among the three tiers of government and the 13 percent Derivation Fund.

While the Federal Government collected N32.59 billion, state governments received N16.53 billion and local governments got N12.74 billion, while N9.24 billion went to the 13 percent Derivation fund.

According to the 2012 second quarter review of the economy by Central Bank of Nigeria, CBN, N56.45 billion was also shared among the three tiers of government as exchange rate gain. As a result, the Federal Government got N15.09 billion; states, N22.58 billion; local governments, N11.64 billion and 13 percent Derivation Fund, N7.34 billion.

NNPC’s refund
The CBN reported that the Nigerian National Petroleum Corporation, NNPC, refunded N15.22 billion to the federation account, which was shared by the sub-national governments and 13 percent Derivation Fund as follows: state governments, N7.48 billion; local governments, N5.76 billion, and 13 percent Derivation Fund, N1.98 billion.

Following this development, the CBN report said: “The total allocation to the three tiers of government in the second quarter of 2012 amounted to N1.739 billion. N71.10 billion was also distributed as the Subsidy Re-Investment and Empowerment Programme, SURE-P, among the three tiers of government and the 13 percent Derivation Fund; Federal Government, N32.59 billion; state governments, N16.53 billion; local governments, N12.74 billion and 13 percent Derivation fund, N9.24 billion.”

The CBN in the report on the economy said: “Available data showed that total federally-collected revenue, during the second quarter of 2012, stood at N2.596 billion, representing an increase of 7.1 and 8.7 per cent above the proportionate budget estimate and the level in the corresponding quarter of 2011, respectively, but a decline of 12.9 per cent below the level in the preceding quarter.

“At N1.981 billion, gross oil receipts, which constituted 76.3 per cent of the total, exceeded the proportionate budget estimate by 19.4 percent, but was lower than the level in the preceding quarter by 16.6 percent.

“The development relative to the preceding quarter was attributed, largely, to the fall in the receipts from crude oil and gas exports as well as domestic crude oil and gas sales owing to the shut down and disruptions caused by maintenance works at various terminals.”

2nd quarter economy
Explaining further how the economy fared in the second quarter of 2012, CBN said: “Non-oil receipts, at N614.60 billion 23.7 percent of the total, was above the level in the preceding quarter by 1.6 percent, but below the proportionate budget estimate by 19.6 percent. The rise in non-oil revenue relative to the preceding quarter reflected, largely, the increase in Corporate Taxes and the Customs and Excise Duties during the review period.

“As a percentage of projected second quarter 2012 nominal Gross Domestic Product, GDP, oil and non-oil revenue were 19.8 and 6.2 percent, respectively. Of the gross federally-collected revenue during the review quarter, N1,400.57 billion, after accounting for all deductions and transfers, was transferred to the Federation Account for distribution among the three tiers of government and the 13.0 percent Derivation Fund.

“The Federal Government received N659.75 billion, while the states and local governments received N334.63 billion and N257.99 billion, respectively. The balance of N148.20 billion went to the 13.0 percent Derivation Fund for distribution by the oil-producing states. Also, the Federal Government received N26.18 billion from the Value Added Tax, VAT, Pool Account, while the state and local governments received N87.25 billion and N61.08 billion, respectively.

“During the period under review, N21.47 billion was drawn from the Excess Crude Account, ECA, to bridge the short-fall in revenue for the period and was shared as follows: Federal N9.84 billion, states N4.99 billion.

SURE-P earnings
“N71.10 billion was also distributed as the Subsidy Re-Investment and Empowerment Programme, SURE-P, among the three tiers of government and the 13 percent Derivation Fund as follows: Federal Government N32.59 billion, state governments, N16.53 billion; local government, N12.74 billion and 13 percent Derivation Fund, N9.24 billion.

“Furthermore, N56.45 billion was shared as exchange rate gain as follows: Federal Government N15.09 billion, state governments, N22.58 billion; local governments, N11.64 billion and 13 percent Derivation Fund, N7.34 billion.
Sharing NNPC refund

“In addition, the NNPC Refund was shared by the sub-national governments and 13 percent derivation fund as follows: states government N7.48 billion; local governments, N5.76 billion and 13 percent Derivation Fund, N1.98 billion.

“Thus, the total allocation to the three tiers of government in the second quarter of 2012 amounted to N1,739.31 billion. This was higher than N3.85 billion, while the oil producing states received N2.79 billion. At N851.99 billion, the Federal Government retained revenue for the second quarter of 2012, was lower than both the proportionate budget estimate and receipts in the first quarter of 2012 by 14.3 and 11.9 percent, respectively.

“It was, however, higher than the receipts in the corresponding quarter of 2011 by 17.6 percent. Of this amount, the Federal Government’s share from the Federation Account, VAT Pool Account and FGN Independent Revenue were N659.75 billion, N26.18 billion, and N101.26 billion, respectively, while “Others” accounted for the balance of N64.80 billion.

Expenditure
“Total expenditure for second quarter stood at N1,063.76 billion, indicating a decline of 16.8 percent relative to the level of the quarterly budget estimate.

“It was, however, higher than the level in the preceding quarter by 11.4 percent. The development, relative to the quarterly budget estimate, was attributed to the non-release of capital outlay during the period.

“A breakdown of total expenditure showed that the recurrent component accounted for 72.9 percent, capital component 23.1 percent, while statutory transfers accounted for the balance of 4.0 percent.

“Further breakdown of the recurrent expenditure showed that the non-debt component accounted for 89.3 percent, while debt service payments accounted for the balance of 10.7 percent.”

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  • We hope the monies realised get applied to the projects earmarked.

  • So at the end of the day the fuel price increase or partial removal of fuel subsidy was aimed at creating another avenue for the federal and state government to siphone the country of more money and share to themselves i.e another avenue for looting,GOD IS WATCHING!.