Govs, FG at Supreme Court over fuel subsidy deductions

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The Supreme Court will on December 8 hear a suit challenging an alleged ‘unconstitutional’ monthly fuel subsidy deductions on crude oil proceeds by the Federal Government. The suit was filed by the 36 state governors through their attorneys-general.

The governors said that the Federal Governments have been engaging in an ‘unwholesome and unconstitutional’ deductions from the crude proceeds. They alleged that the FG usually deducts funds from the proceeds for fuel subsidy and other expenditures before remittance to the federation account.

They claim that their various states had been shortchanged through the deductions by the Nigerian National Petroleum Corporation on the instruction and authority of the Federal Government. They also argue that the practice, which they urge the apex court to stop, had led to inaccuracies in the oil revenue remitted to the federation account.

The plaintiffs sued the Federal Government through the Attorney-General of the Federation, Mr. Mohammed Adoke, and joined the National Assembly as the second defendant. They had instituted the suit marked SC/149/2012 with the Supreme Court as its original jurisdiction (court of commencement) in 2012.

But both the Attorney General of the Federation represented by Mr. Taiwo Abidogun and the National Assembly represented by Mr. Ken Ikonne, only regularised the filing of their statements of defence and notices of preliminary objection during the court proceedings of September 23, 2014.

Through their lawyers, Mr. Joseph Daudu and Chief Lateef Fagbemi, both Senior Advocates of Nigeria, the plaintiffs are urging the Supreme Court to, among other prayers, declare the practice as violating provisions of sections 88 and 162 of the 1999 Constitution of the Federal Republic of Nigeria.

They also seek, “a perpetual order of injunction retraining the Federal Government of Nigeria by itself, servants, agents privies and those taking instruction from it from making any further deductions from the amount standing to the credit of the federation account for the purpose of funding the payment of fuel subsidy claims or any other purpose whatsoever, except those authorized by section 162 of the 1999 Constitution of the Federal Republic.”
They are also praying for an order directing the Attorney-General, Mr. Mohammed Adoke of the Federation to on behalf of the Federal Government “give account of all subsidy claim deducted from the federation account from 2007 till date”.

Their statement of claim reads in part, “The plaintiffs aver that there are inaccuracies in the crude oil and gas revenues remitted to the federation account by the Nigerian National Petroleum Corporation caused by wrongful deductions at source by the NNPC to fund her operation.

“The plaintiffs aver that as a matter of practice, subsidy claims ought to be remitted to the NNPC from the Petroleum Support Fund by the Federal Ministry of Finance based on claims from oil marketers approved by the PPPRA.
“However, NNPC’s practice is to remit to the federation account, amount payable for domestic crude less subsidy claim. The NNPC then requests the Federal Ministry of Finance to pay the amounts due to subsidy claim back in to the Federation Account being the balance cost of the domestic crude.

“According to a report of the Federal Ministry of Finance dated November 22, 2010, titled, “The Interim Report on the Process of Forensic Review of NNPC” the implication of this unconstitutional practice is that the actual remittance of proceeds for domestic crude sales to the Federation Account is far less than the amount expected.”
The matter was on the September 23 adjourned till December 8 specifically for the hearing of the plaintiff’s motion for direction on time in which parties will file and exchange their respective briefs.

The Attorney-General of the Federation and the National Assembly had on September 23, moved their respective motions for extension of time to file their statement of defence and also to enter conditional appearance.
They also filed notices of preliminary objection in which they argue that the Supreme Court lacks jurisdiction to hear the matter under its original jurisdiction.

They contend that the appropriate court to institute the suit is the Federal High Court since the deductions the plaintiff are challenging were made by the NNPC which is a federal agency.

They add that the matter was statute barred on the grounds that the suit was only instituted in 2012 while it is challenging the deductions made in 2007, 2008, 2009, 2010 and 2011. They also argue that claims of the plaintiffs do not disclose any cause of action against them.

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