The directives, detailed in a December 28 circular from the Finance Ministry and announced on Tuesday, marks a departure from the single treasury account system used during Muhammadu Buhari’s administration. This policy is part of the federal cabinet’s broader strategy under President Tinubu to enhance revenue generation, and to promote fiscal discipline, accountability, and transparency in the management of resources and prevention of waste.

The directives read, “All Ministries, Departments and Agencies (MDAS) that are fully funded through the annual federal government budget (receiving personnel, overhead and capital allocation) and on the schedule of Fiscal

“Responsibility Act, 2007 and any addition by the Federal Ministry of Finance should remit one hundred per cent of their Internally Generated Revenue (IGR) to the Sub-Recurrent Account, which is a Sub-component of the Consolidated Revenue Fund (CRF).

“Agencies and departments that are partly funded by the federal government – having budgetary allocations for capital or overhead expenditures – are expected to remit 50 per cent of their gross revenue while statutory revenue like “tender fees, contractor’s registration, sales of government assets, etc should be remitted one 100 per cent to the sub-recurrent account.

“For the avoidance of doubt, the Office of the Accountant-General of the Federation shall open new TSA Sub-Accounts for all Federal Government Agencies/Parastatals listed on the schedule of Fiscal Responsibility Act, 2007 and any additions by the Federal Ministry of Finance, except where expressly exempted.

“The new account opened for Agencies/Parastatal shall be credited with inflows in the old revenue-collecting accounts based on the new policy implementation of 50 per cent auto deduction in line with Finance Act, 2020 and Finance Circular, 2021, 50per cent cost to revenue ratio.

“The Office of the Accountant General of the Federation (0AGF), subject to the categorisation of agencies, shall map and automatically effect direct deduction of 50 per cent on gross revenue of Self/partially funded

“Agency/Parastatals and 100 per cent for fully funded agencies/ parastatals as interim remittance of the amount due to the Consolidated Revenue Fund.”

SOURCE: Naija News

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NNPCL, marketers clash over subsidy, operators peg petrol at N1,200/litre

The Nigerian National Petroleum Company Limited and fuel marketers under the aegis of the Independent Petroleum Marketers Association of Nigeria, on Tuesday, clashed again over the removal of subsidy on petrol.

This came against the backdrop of the depreciation of the naira against the United States dollar at both the official Investors & Exporters Window and the parallel market.

On Tuesday, the local currency closed at 998/dollar at the official market, while it traded at 1,225/dollar at the black market.

On the back of the falling naira rate, economists and oil marketers said PMS subsidy was increasing in recent times, but the NNPC quickly countered these positions and declared that it was recovering its full cost on the importation of Premium Motor Spirit, popularly called petrol, countering the positions of

The Chief Executive Officer, Financial Derivatives Company, Bismarck Rewane, had during a live television programme on ChannelsTV on Sunday, explained that fuel subsidy was not removed but reduced.

Similarly, oil marketers told our correspondent on Tuesday that subsidy on petrol was increasing considering the crash of the naira against the United States dollar and the cost of crude oil, stressing that PMS should sell for N1,200/litre in a free market.

Petrol, which is solely imported into Nigeria by the NNPCL, currently sells for between N617/litre to N660/litre, depending on the location of purchase in Nigeria.

Also speaking on the matter, the Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said there was partial subsidy on petrol, but noted that the commodity was subsidised by the government for political, social and economic reasons.

Full cost recovery

But when contacted, the Chief Corporate Communications Officer, NNPCL, Olufemi Soneye, described the positions of economists and marketers as assumptions, and insisted that the Federal Government had stopped subsidy on petrol.

President Bola Tinubu had during his inaugural speech on May 29, 2023, declared that subsidy on petrol was gone, a declaration that was effectively implemented the next day by NNPCL.

Before Tinubu’s declaration, the pump price of petrol was below N190/litre, but it jumped to over N500/litre after the President’s statement, and moved up again to over N600/litre a few weeks later.

Asked to state if the NNPCL, being Nigeria’s sole importer of petrol, subsidising the commodity as posited by dealers and experts, the oil firm’s CCCO replied, “We prioritise our time on substantive matters rather than responding to assumptions.

“At NNPC Ltd, we prioritise national development through energy security and sustainable growth. We reiterate that the Nigerian government does not pay subsidy on fuel; we recover full costs from our imported products.

“As a global energy company, our focus remains on fostering a vibrant and energy-secure Nigeria.”

‘Subsidy reduced’

Rewane had earlier explained that subsidy on petrol was reduced and not removed, while featuring on a live television programme on Sunday evening, as he further highlighted the effects of the reduction in fuel subsidy and how it was affecting salary earners in Nigeria.

He said, “At the inauguration, it was said that (fuel) subsidy was gone but subsidy was actually reduced.”

Buttressing his position, he explained, “There is the convergence of exchange rates and reducing the windows into one. The consequence of that is that money has been transferred from consumers to the government.

“Subsidies are reversed taxes; if you reduce them, you increase the people’s taxes and reduce their income. What has happened is that government revenue has increased by 44 per cent between May and June (2023). Money has been transferred to the government but what is the government doing with it?

“The consumers, on the other hand, had a minimum wage, which in dollar terms was $40 in 2002. In 2019, it was about $70, but it has now been reduced to $24.”

Marketers project N1,200/litre

The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Ukadike Chinedu, stated that subsidy on petrol was rising and that the cost of the commodity should be around N1,200/litre in a free market.

“To be pragmatic in this analysis let’s consider the cost of petrol today in the United States. For premium petrol, it is $2.99, while super petrol sells for $3.15 or $3.10 depending on the part of that country where you are making the purchase.

“Now, $3 in Nigeria is over N3,000, because a dollar in the parallel market is over N1,000. You can also see the cost of diesel, that is over N1,000/litre, and it is important to state that petrol is usually higher in price than diesel in a free market.

“So if you consider the cost of diesel, dollar and other international factors, the price of petrol in Nigeria should be around N1,200/litre, but the government is subsidising it, which to an extent is understandable,” he stated.

Ukadike noted that he had earlier explained that the government was implementing quasi-subsidy, and by this it means that “the Federal Government, instead of taking out the subsidy by 100 per cent, decides to take out about 50 per cent.”

The IPMAN official, however, expressed optimism again that the cost of refined petroleum products would reduce as soon as the Port Harcourt and Dangote refineries start producing the commodities.

“I also believe that there will be a reduction in the prices of petroleum products this year when you consider what the government is currently doing. The coming onboard of the Port Harcourt refinery and the supply of crude to Dangote refinery are good developments in the sector.

“Their operations will help stabilise the price of PMS and other petroleum products in Nigeria, because it will definitely cut down the importation of products,” Ukadike stated.

SOURCE: Punch