Reps reject proposed oil subsidy removal

THE House of Representatives, on Thursday, broke its silence on the proposed fuel subsidy removal being championed by the presidency, describing the proposal as premature and urged the presidency to explore alternative funding of budget deficit.
This was part of the decision of the House while adopting the recommendations of its joint committees on Finance, Appropriations, Legislative Budget and Research and National Planning and Economic Development mandated to review the 2012-2015 Medium Term Fiscal Framework (MTFF) presented to the National Assembly by President Goodluck Jonathan.
President Jonathan had forwarded to the National Assembly “2012-2015 Medium Term Fiscal Frame Work and Medium Term Expenditure Framework,” which contained the contentious fuel subsidy removal policy of his government.
The president, in the document, had said that “a major component of the policy of fiscal consolidation is government's intent to phase out the fuel subsidy beginning from the 2012 fiscal year. This will free up about N1.2 trillion in saving, part of which can be deployed into providing safety nets for poor segments of the society to ameliorate the effects of the subsidy removal.”
While adopting the recommendations of the committees, the House noted that the budget deficit ratios as contained in the reviewed Expenditure Framework projected 2.7 per cent, 2 per cent and 1.5 per cent for 2012, 2013 and 2014 respectively.
The chairman, House Committee on Appropriation, Honourable John Enoh, while speaking during the consideration of the committee's report, explained that the joint committee deliberated on the critical parameters for the 2012, 2013 and 2014 budget proposals.
Part of the recommendations of the committee adopted by the House included N155 to $1 exchange rate; daily oil crude production figures of 2.48mbpd; 2.55mbpd and 2.58mbpd for 2012, 2013 and 2014 respectively as well as benchmark price of $70 per barrel considering the uncertainties of the global economic recovery and the average market price of $83.50 to date for 2011.
On the planned fuel subsidy removal, the committee recommended that, “the proposal on fuel subsidy removal, as contained in the revised Fiscal Strategy paper, is premature. Sources other than relying on savings from proposed subsidy removal as part of financing items for expected deficit should be explored.”

Source: Nigerian Tribune