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Oil Subsidy: Bayelsa Accuses FG of N450bn Illegal Deductions

Bayelsa State Governor Seriake Dickson

From Tayese Mike,Yenagoa

The government of Bayelsa state, on Tuesday, accused the Federal Government of illegally deducting 4% as fuel subsidy from its monthly allocation, which has amounted to over N450bn in the last 13 years.

The Commissioner for Finance, Mr. Maxwell Ebibai, stated this in Yenagoa during the monthly transparency briefing for the month of August 2019.

 Ebibai said the deduction was made without the approval of the Council of States, which dated back to 2006 after the debt relief granted by the Paris Club to the country during President Olusegun Obasanjo administration.

The fuel subsidy, according to him, was being deducted from the 13% derivation with adverse effects on the economy of the states in the South South region.

Ebibai alleged that the Federal Government had been making withdrawals from the Excess Crude Account to fund  petroleum subsidy, arms purchase and other activities that did not have any direct bearing on the oil producing states, thereby denying them of their full 13% derivation.

He said, there was an improvement in the state’s allocation for the month of August as against that of July 2019, but noted that the Governors Forum and the Council of States would deliberate on the matter.

 “We noticed that there was a bit of improvement with the derivation figure for August compared to July.

It is important that we highlight that for a long time, under the pretext that we are saving for the rainy day, the Federal Government used monies in the Excess Crude Account for activities such as petroleum subsidy, arms purchase and others. Some states are contributing unfairly to those activities where we use that money for things like petroleum subsidy and other so-called critical government expenses that do not relate to the states.

“So that battle has been on. We have managed to reach some consensus as regards that. But if we want to save money in the excess crude account, let the 13% due to the states be given to them. So we know we are contributing at par with our colleagues based on what is received.

“By recent calculations, from the 13% derivation money that has passed through the excess crude account that the people of Bayelsa have not enjoyed the benefits amount to about N450bn. That is what in the name of one nation we are subsidising.

“This does not affect Bayelsa alone but almost all the oil producing states. We have been on this engagement and have some positive results in the
month of August. The issue of backlogs are going to be handled as a nation because the monies taken from the account is humongous.

“So the Governors Forum and
Council of States will look at the total liability of what has been
taken from the excess crude account, the beneficiaries and what they are entitled to and what the federal government is going to do about it.

It will not happen the same way where the deductions were remitted to the NDDC and it was the Niger Delta states that had to suffer. The Finance Commissioners in the Niger Delta states are on one page on this and beyond just getting what should come to us, the battle is for the governors to take up.”

Presenting the financial statement for the month of August, Ebibai said the total inflow from the federation account was N14.5 billion, comprising statutory allocation of N3.5 billion, derivation N8.6 billion among others.

He also announced that the total deductions from the federation account stood at N1.1 billion while the net receipts for the month of August was N13.4 billion.

He said other receipts for August include IGR of N882 million, refund from other sources N1.5 billion and local government bailout funds of N16.3 million, bringing the total receipts for August to N15.

7 billion.

Ebibai explained that the state government made a total payment of N7.4 billion leaving a net balance of N8.3 billion.

He added that out of the amount, N2.6 billion was spent on recurrent expenditure while capital payments gulped N5.5 billion leaving a balance of N401 million.

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