Subsidy: RMAFC backs Tinubu, withholds NNPCL N8.4tn FAAC contribution

The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has backed President Bola Tinubu’s decision to stop the subsidy on petrol products.

In his inaugural address on May 29, Tinubu stated that “subsidy can no longer justify its ever-increasing costs in the wake of drying resources.”

The President promised to use the funds to help Nigerians with their fundamental infrastructure requirements and the backing of his administration in doing so.

In response, the RMAFC Chairman, Mohammed Shehu, said that paying “humongous” sums to a select few under the guise of subsidies constituted a significant drain on the country’s limited resources.

He claimed that because of the petrol subsidy system, the Nigerian National Petroleum Company Limited (NNPCL), one of the largest contributors to the Federation Account, had now ceased making payments to the government coffers.

The RMAFC boss believes that the President’s announcement that gasoline subsidies will be eliminated due to non-budgetary provisions for subsidies was a stroke of genius that ended the curse and was the right move.

“It is saddening to note that since 1st January, 2022 to date, the Nigeria National Petroleum Company Limited (NNPCL) has not been contributing to the Federation Account due to the claimed subsidy payments,” the statement read.

“The country can no longer sustain fuel subsidies whose demerits far outweigh its benefits to the citizenry,” the statement read.

“The total amount withheld by the NNPCL as claimed subsidies for this period amounted to N8,480,204,553,608.13 as reported by the Office of the Accountant General of the Federation (OAGF) which is yet to be reconciled by the RMAFC, OAGF, and NNPCL.”

Shehu emphasized that it would be foolish to continue “the phantom payments of subsidy at the detriment of other critical sectors of the economy” in an environment where the records of transactions involving petrol subsidies are opaque and crude oil prices are set on a global scale.

He also emphasized that the end of under-recovery payments will put an end to the subsidy regime’s state of uncertainty and release money for the implementation of crucial national development and human capital development projects.