Nigeria Spent N1.16tn on Fuel Subsidy in 2021, RMAFC Tells Senate

…Senate Threatens to Compel Auditor-General’s Appearance

The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has revealed that Nigeria spent N1.16 trillion on fuel subsidy in 2021, while N1.20 trillion was deducted from crude oil sales proceeds due to subsidy-related payments.

Chairman of the Commission, Dr. Mohammed Bello Shehu, disclosed this on Thursday while appearing before the Senate Public Accounts Committee (SPAC), which is investigating the 2021–2023 audit reports on the oil and gas sector conducted by the Nigeria Extractive Industries Transparency Initiative (NEITI).

Presenting the Commission’s submission, Shehu said fuel subsidy accounted for the largest deduction from federation revenues during the period under review.

He added that other deductions included N16.20 billion for crude oil and petroleum product losses, N22.05 billion for pipeline repairs and maintenance, and N6.75 billion for strategic petroleum stock holding.

The RMAFC chairman also faulted the method used in calculating the constitutionally guaranteed 13 per cent derivation fund for oil-producing states.

According to him, computing the derivation on the balance of revenue after deductions from total crude oil earnings undermines the constitutional objective of the derivation principle.

“The practice of computing the 13 per cent derivation on the balance of revenue after deductions from total collections is contrary to the intention of the derivation objective,” Shehu told the committee.

Meanwhile, the Senate panel deferred consideration of the submission by the Niger Delta Development Commission (NDDC), giving members additional time to study the agency’s report ahead of its rescheduled appearance next Wednesday.

The committee, chaired by Senator Ibrahim Dankwambo (Gombe North), however, expressed displeasure over the absence of the Auditor-General of the Federation from the investigative hearing.

Dankwambo described the failure of the Auditor-General to appear, or send a representative, as unacceptable and warned that the committee would invoke the constitutional powers of the National Assembly if he failed to honour the next invitation.

“The Auditor-General must appear before this committee on Tuesday next week without fail. If he does not, the committee will invoke the powers of the National Assembly to compel his appearance,” the senator warned.

The Senate Public Accounts Committee is probing findings contained in the NEITI audit reports covering the 2021 to 2023 fiscal years, with a view to addressing revenue leakages, strengthening accountability and improving transparency in Nigeria’s oil and gas sector.