THE QUESTION: Has Buhari scrapped fuel subsidy, SURE-P as 2016 budget suggests?

President Muhammadu Buhari may have scrapped payment of fuel subsidy for the year 2016, 2017 and 2018 as suggested by the medium term expenditure framework (MTEF) and fiscal strategy paper (FSP) made available to TheCable.

The paper also suggests that the federal executive council, as headed by the president, may have totally scrapped the Subsidy Reinvestment Programme (SURE-P).

Interestingly, the paper shows that the federal government would recover N50bn in misappropriated funds and directly looted funds.

TOO SOON TO CONCLUDE

‎

Earlier in April, a copy of the 2015 budget seen by TheCable showed that there was no provision for fuel subsidy for the year, however, the Goodluck Jonathan administration did not remove subsidies on premium motor spirit (PMS) and kerosene.

The benefit of hindsight has shown that the Jonathan administration paid 156bn in fuel subsidies before leaving office in June, while Buhari has approved another N407bn for the same purpose.

This goes to say that subsidy may still be paid, even when not provided for in the appropriation bill for the 2016 fiscal year.

SURELY BUHARI HAS NO AMNESTY FOR SURE-P

After the Jonathan administration increased the pump price of petroleum in 2012, following a botched attempt to totally part with subsidy, the government instituted a reinvestment programme to channel subsidy funds into.

Christopher Kolade, former chairman of the SURE-P, revealed that the initiative under Jonathan was clouded by “politics and eventual lack of credibility”.

His comments and many others reported widely in public domain questioned the credibility of the programme.

However, N21bn was billed for the programme in 2015, with no record in the MTEF on its performance within the year.

A breakdown of the 2015 budget shows that the presidential amnesty programme gulped N63.2 billion, with N23.6 billion for 30, 000 Niger Delta ex–militants, N5.5 billion to operational cost, and N34.1 billion to reintegration of transformed ex-militants.

The MTEF shows that all of these is gone; Buhari sure has no amnesty for SURE-P.

BUHARI’S SURE-P

It may not be dubbed by the president as SURE-P, but if the Buhari administration eventually removes fuel subsidy, the act can be defended that the subsidy removed is being channelled to catering for the poor.

While campaigning before the 2015 presidential election, the president’s party promised entrepreneurial development programme for corps members, feeding for school children and conditional cash transfer for less privileged Nigerians.

According to the paper, the government has billed N300bn for what it titled “special interventions”, which would be Buhari’s own way of reinvesting subsidy.

MTEF DEAD ON ARRIVAL?

As bright as the future seem with the plans of the ministry of budget and national planning as led by Udo Udoma, it might be weighed down by dwindling oil prices and the overly optimistic benchmark.

The budget is benchmarked at $38 per barrel of oil, when the Organisation of Petroleum Exporting Countries (OPEC) oil is currently at $34.80 on Thursday.

If crude oil follows the same pattern seen in the past 11 months, this MTEF may be dead on arrival.