RMAFC to Senate: Fuel subsidy cost Nigeria N1.16trn in 2021

The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has disclosed that Nigeria spent N1.16 trillion on fuel subsidy in 2021, with another N1.20 trillion deducted from proceeds of crude oil sales due to the Federation Account.

The Chairman of the commission, Dr Mohammed Shehu, made the disclosure on Thursday while appearing before the Senate Public Accounts Committee investigating audit reports on the oil and gas sector covering 2021 to 2023.

The investigation is based on reports prepared by the Nigeria Extractive Industries Transparency Initiative (NEITI).

Shehu told lawmakers that fuel subsidy represented the largest deduction from federation revenues during the period under review, alongside other operational expenses in the petroleum sector.

According to him, crude oil and petroleum product losses amounted to N16.20 billion, while pipeline repairs cost N22.05 billion and strategic petroleum stock holding attracted N6.75 billion.

The RMAFC chairman also criticised the current method of calculating the 13 per cent derivation fund, arguing that it contradicts the constitutional intent of the revenue-sharing formula.

He maintained that computing the derivation on the balance of revenue after deductions rather than on total collections undermines the objective of the constitutional provision.

Meanwhile, the committee deferred consideration of a submission by the Niger Delta Development Commission (NDDC), saying members needed more time to review the agency’s report before reconvening with its officials next week.

The hearing also drew criticism over the absence of the Auditor-General for the Federation.

Chairman of the committee, Senator Ibrahim Dankwabo, faulted the Auditor-General for failing to appear or send a representative and warned that the Senate could invoke its constitutional powers to compel his attendance if he fails to honour the next invitation.

Dankwabo directed the Auditor-General to appear before the committee at its next sitting or face legislative action to enforce compliance.