Justice Mariam Aloma Mukhtar, Chief Justice of Nigeria

The Supreme Court will on December 8 hear the suit filed by the 36 states of the federation challenging the alleged irregularities in the methods adopted by the federal government, acting through the Nigerian National Petroleum Corporation (NNPC), in deducting fuel subsidy funds.
The states alleged that the federal government has been cheating them through the ways and manner the subsidy claims were paid.

Mr. Joseph Daudu and Mr. Lateef Fagbemi, both Senior Advocates of Nigeria (SAN), filed the suit on behalf of the states.
The states also enjoined the Supreme Court to, among other prayers, declare the practice as violating the provisions of sections 88 and 162 of the 1999 Constitution.

They asked the apex court to stop the federal government from further deducting the fuel subsidy fund and other expenditure from the oil proceeds before they are paid into the federation account.
They also asked the court to declare the present practice by the federal government as unwholesome and unconstitutional.

They also argued that the practice, which they urged the apex court to stop, had led to inaccuracies in the oil revenue remitted to the Federation Account.
The Office of the Attorney-General of the Federation and the National Assembly were the two defendants.

However, both the Attorney General of the Federation represented by Mr. Taiwo Abidogun and the National Assembly represented by Mr. Ken Ikonne are challenging the legitimacy of the suit.
In separate preliminary objections, the defendants asked the court to strike out the case for lack of jurisdiction to hear the matter.

They contended that the appropriate court to institute the suit should have been the Federal High Court since the deductions the plaintiff were challenging were made by the NNPC, a federal agency.
They added that the matter was statute barred on the grounds that the suit was only instituted in 2012 even though it was challenging  deductions made in 2007,2008,2009,2010 and 2011.

They also argued that claims of the plaintiffs did not disclose any cause of action against them.
Other reliefs being sought by the states are: “a perpetual order of injunction restraining 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 authorised by section 162 of the 1999 Constitution.

“An order directing the Attorney-General 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.”
In their statement of claim, the states deposed as follows: “The plaintiffs aver that there are inaccuracies in the crude oil and gas revenues remitted to the federation account by the NNPC 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.”

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