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FG illegally withdrew N395bn from ECA to fund subsidy
The Fiscal Responsibility Commission (FRC) says that the Federal Government withdrew the sum of N395bn to fund subsidy on petroleum products in 2013.
The commission in its 2013 Annual Report and Audited Accounts recently released, said the withdrawal of the money from ECA to fund the subsidy regime on petroleum products was illegal as it lacked the backing of the law.
According to Punch, the report showed that a summary of transactions in the Excess Crude Account as of 2013 showed that N50bn was used to fund the subsidy regime in the first quarter of the year. In the second quarter, the sum increased to N110bn.
No money was spent on the subsidy from the account in the third quarter of the year, but in the final quarter of the year, the withdrawal leaped to N235bn, making a total of N395bn withdrawal for subsidy funding within the year.
The Federal Government created the ECA in 2003 as a buffer against volatility in crude oil prices. Proceeds from the sale of oil above the budget benchmark price are paid into the account which belongs to the three tiers of government.
The Fiscal Responsibility Commission said the use of money from the Excess Crude Account to pay for petroleum products subsidy and Petroleum Equalisation Fund was not justifiable by law.
It said, “Funds have been deployed towards payment for petroleum products subsidy and PEF. It is difficult to find justification for this in the Fiscal Responsibility Act 2007.”
The report said, “The total inflow into the ECA in 2013 was N1, 011bn while the total outflow from the account was N1, 768.57bn.
This means that the outflows into the account were N757.13bn higher than the inflows in 2013. In percentage terms, the outflows were higher than the inflows by 74.86 per cent.
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