02 June 2017, Sweetcrude, Abuja – A Senate panel has recommended that Nigerians should pay a N5 levy on each litre of petroleum product imported into the country.
The proposed increase of N5 per litre on premium motor spirit (PMS) otherwise called petrol and as well as on diesel was made by the Senate Committee on Works in its final report on a bill titled ‘National Roads Fund (Establishment, etc) Bill 2017’. A bill to that effect is already in the Senate.
The import of the proposed fuel levy is that end users (motorists) will pay N5 tax on every litre of fuel bought at any fuel station.
The Senate Committee on Works under the leadership of Sen. Kabiru Gaya in the report also advocated implementation of a special 0.5 percent levy on commercial vehicle passengers’ fares, all in a bid to raise money to pay for road construction and maintenance.
The bill reads in part: “There shall be a road fund charge of 0.5 per cent on the assessed value of any vehicle imported at any time into Nigeria. There shall be lease, license or other fees which shall be 10 per cent of the revenue accruing from lease or license or other fees pertaining to non-vehicular road usage along any federal road and collected by the Federal Roads Maintenance Agency.
“Fuel levy of N5 chargeable per litre on any volume of petrol and diesel products imported into Nigeria and on non-locally refined petroleum products.
“International vehicle transit charges.”
The bill will by implication affect all users of petrol and diesel, including industries.
The bill which is part of the 11 economic reform bills initiated by Dr. Bukola Saraki-led leadership of the Senate as contribution to economic recovery by the country has already been endorsed by the House of Representatives.
The report which was listed on the order paper for consideration on Thursday was not considered because of time constraints.
It was stepped down for consideration at the next legislative day which means that the report may be considered and adopted next Tuesday.
The bill made provisions for nine sources for revenue generation for the planned National Roads Fund.
According to the bill, the sources are “fuel levy of five naira chargeable per litre on any volume of petrol and diesel products imported into Nigeria and on locally refined petroleum products; axle load control charges.
Others include toll fees (a percentage not exceeding 10% of any revenue paid as user charge per vehicle on any federal road designated as a toll road (this is not applicable to PPP roads); international vehicle transit charges; inter-state mass transit user charge of 0.5% deductible from the fare paid by passengers to commercial mass transit operators on inter-state roads.
The panel further recommended that there be roads fund surcharge of 0.5% chargeable on the assessed value of any vehicle imported at any time into Nigeria; lease, license or other fees which shall be 10% of the revenue accruing from lease or license or other fees pertaining to non-vehicular road usages along any federal road and collected by the federal roads agency and grants and loans: and gifts of land, money or other property and gifts of land, money or other property.
The bill further stated that the National Roads Fund will be established with high levels of independence under the jurisdiction of the Federal Ministry of Finance which will only oversee the fund for policy direction.
The works committee which processed the bill informed the Senate in its report that “The National Roads Fund shall set aside an amount not exceeding 3% of the total monies accruing to it in the preceding year as administrative fund.
“The use of National Roads Fund is restricted to routine and periodic maintenance works on roads and the administration of the road network, which includes research and development.
“Roads agencies that will receive disbursements from the National Roads Fund must be established by law as independent agencies with dedicated accounts to receive disbursements from the National Roads Fund.
“The National Roads Fund will be excluded from the consolidated revenue fund and Treasury Single Account.”
Gaya had on October 19, 2016 made a lead debate on the bill by submitting that Roads Fund Solution is the way out for rehabilitation and maintenance of national roads in Nigeria.
According to him, “At the core to the Road Fund Solution is the concept that some of the insufficiency and unpredictability of funding (and by extension, planning), can be mitigated by extracting additional funds from those that use the road assets in the form of a user based charge or levy”.
The 11 high priority economic recovery bills from where the National Road Fund Bill originated is initiated by the National Assembly leadership to help lift the country out of recession.
They include the Petroleum Industry Governance Bill; National Development Bank of Nigeria Bill; National Road Fund Bill; Federal Roads Authority Act (Amendment) Bill and National Transport Commission (Establishment) Bill.
Others are Nigerian Ports and Harbours Authority Act (Amendment) Bill; Warehouse Receipts Act (Amendment) Bill; Companies and Allied Matters Act (CAMA) (Amendment) Bill; Investment and Securities Act (ISA); Customs and Excise Management Act and Federal Competition Bill.The bill that will compel motorists to pay N5 on each litre of petrol and diesel is titled: “National Roads Bill.”
It was presented by the Chairman, Senate Committee on Works, Kabiru Gaya.
The N5 levy on each litter will be part of sources of revenues for the proposed National Roads Fund.
The Red Chamber will next week begin the clause by clause consideration of the report presented by the Senate Committee on Works.