FUEL SUBSIDY REMOVAL: OUR OFFER - FG
By EMMA UJAH, DANIEL IDONOR, OLA AJAYI, VICTOR AHIUMA-YOUNG & YEMIE ADEOYE
ABUJA-Following mounting opposition to the planned removal of fuel subsidy, the Federal Government declared yesterday that the plan is not yet a done deal as talks with various stakeholders were ongoing, even as it stated that no date has been fixed for take-off of the removal of the subsidy.
The government has also set up a committee of highly respected Nigerians to manage the proceeds from the subsidy when it is eventually removed just as the new World Bank Country Director in Nigeria, Ms Marie-Francoise Marie-Nelly, described the ongoing debate on the removal of subsidy as 'a healthy debate'.
Minister of Petroleum Resources, Deziani Allison Madueke who spoke to newsmen during the ongoing Commonwealth Business Forum in Perth, Australia, disclosed that a think-tank that would advise government on the process has been put together; but refused to give the names of members of the committee.
The Minister, however, said the list is already before the president for approval, stating that it is this committee of highly respected Nigerians, that would be saddled with the responsibility of managing the gains.
Mrs Allison-Madueke who explained that government opted for the removal of subsidies as all punitive measures to make racketeering by dubious businessmen unattractive have not succeeded, however noted that President Jonathan is determined that the people get full benefit if petroleum subsidies must be removed.
President Goodluck Jonathan, Premier of Western Australia, Hon. Colin Barnett and Gov. Patrick Yakowa of Kadua State after a bilateral talks in Perth, Australia. Photos-State House.
'It has become pertinent that we find other ways to utilise the vast resources that are being channelled into the subsidy which are not reaching the masses. This time around, once we have met with the various stakeholders and agreed on a formula, setting major deregulatory benefits would be put on the table.
'Government would not handle the implementation of these benefits, so that it would be open and transparent. As we speak a committee of a highly-respected Nigerians is being put together, who would monitor and advise. And there are major benefits that will cut across all major sectors of the economy. Some of them involve road work, major public maintenance work, ongoing mass transportation, schemes for skilled and unskilled youths and of course there will be areas for maternity and child care. But we shall ensure that across the board, the package is robust and monitored by Nigerians of high integrity so that it is clear that it is a credible and transparent process.
'In the area of public works, we shall not go through the government channels as usual, as Special Purpose Vehicle (SPV) would be set up specifically to handle it so that we don't get bogged down in the usual manner of process and procurement issues. We shall mobilise upfront, because deregulation subsidies are paid monthly and we cannot wait to collect money monthly so the money would be borrowed upfront from the CBN and mobilisation will start immediately so that it would be clear that we intend to put our money where our mouth is this time around.
'Mr. President is adamant that if we remove subsidy we must give Nigerians the full benefits and the full impact of that removal.'
According to her, the issue of subsidies not reaching the people it was meant for has been of a great concern to the government saying, 'we have fought hard to try to ensure that it does. I think that all Nigerians will be very happy, we cannot please all the people all the time but I think most Nigerians will be happy with quantum and impact of all the parameters that we are putting in place to ensure that what we are saying would actually be done.'
Explaining further on why subsidies on petroleum products must go, Madueke said, 'I think as painful as it is to us as a government it is quite clear that the issue of subsidies have not worked in the manner in which they were intended for the Nigerian masses. The intention of course was to relieve the suffering of the masses across the board by ensuring that our petroleum products are subsidised to give them a comfortable level of procuring the products, unfortunately, since we came into government as a continuum over a year ago, it has become quite clear that the majority of the subsidies were actually going to the middle line operators.'
'Take kerosene for example, government subsidises at the tune of about N105 per litre, the landing cost is about N145 per litre, we sell to the middle line operators at N40 per litre, which means that we are subsidising at N105 per litre and we expect that it will reach the consumer or the masses at roughly N50 per litre that is our recommended price, but as we all know, it reaches them at a more higher cost. On the average right now, it cost N85 per litre. There was a time when it has been over N100 per litre. 'And this is very painful for us. We have flooded the market with the product, yet there is still some part of the country where the product remains expensive, which means that the middle line operators are gaining both ways. They receive the subsidy from government and at the same time they are charging the consumers double and sometimes more than double the price. In other words the masses are not gaining the benefit of this heavy subsidies'.
She also noted that all measures put in place to arrest the situation in the past including closing down businesses and stations failed.
'A lot have been done already, operators, business and stations have been closed down, some suspended from service as punitive measures by our regulators, DPR. But the truth of the matter is we are not in a military regime, the market forces of supply and demand has to be allowed to a certain extent. Yes we are tightening up operations even as we speak; we are reforming our regulatory agencies as well. Because we need to be tight, we needed them to be working at the optimal level going forward, even in terms of deregulation, when it happens,' she said. She also put part of the blame for the astronomical rise in cost of subsidy on the increase in price of the product at the international market.
She also doubted the possibility of government implementing the removal of subsidy in the coming year as planned, as she noted that until all discussions are concluded and agreement reached, it would be wrong to give a definite date.
'We are still in the discussions with labour and other stakeholders. Until that is finished I don't think it is right to give any definite date for the roll out of the implementation of subsidy removal. We are still in discussion with major stakeholders including the National Assembly.
The minister who also spoke on the Petroleum Industry Bill (PIB) said at the moment the situation is not in the hand of the executive as the bill is still before the National Assembly, adding that 'It becomes almost illegal for the executive to officially write on the matter to the NASS.'
FG ready for talks with labour
Meantime, Minister of Labour and Productivity Chief Chukwuemeka Wogu has declared the Federal Government's readiness to dialogue with the Nigeria Labour Congress (NLC) over the planned removal of subsidy from the price of petrol next January.
The Minister made the declaration yesterday in Abuja while speaking to journalists after declaring open the 9th Annual Meeting of Permanent/Principal Secretaries/Directors General Responsible for Labour of the African Regional Labour Administration Centre (ARLAC).
He further stated that the Ministry of Labour and Productivity would soon invite NLC leaders for a fresh round of dialogue.
Oil subsidy debate healthy- World Bank
The new World Bank Country Director in Nigeria, Ms Marie-Francoise Marie-Nelly, yesterday, described as 'a healthy debate' , the on-going controversy over federal government's plan to remove petroleum products subsidy.
Speaking with newsmen on the issue, at an interactive forum in Abuja, she said that the debate was good for the country, as according to her, it would enable the federal government create greater awareness on the importance of the policy to the Nigerian economy, while at the same time creating an opportunity for the people to express their concerns over its implications for the welfare of ordinary citizens and how to protect them.
Her words, 'on oil subsidy, I see in it what I would say is a healthy debate. In fact I would like to throw the story back to you and say 'what do you think, because I have just arrived. But more seriously, this is a policy decision. And it is an important policy decision and we think that it is up to the federal government of Nigeria to articulate its policy regarding the removal of oil subsidy. And it not for the partners: the World Banks, IMF or any other to come and indicate what should be done.
'We do respect the decision that has been taken and I think it is quality, healthy debate. It is important for the citizens to understand what it is that the policy is meant to achieve. Why are we removing subsidy.
Informal workers reject planned subsidy removal
Also workers in the informal sector yesterday rejected Federal Government planned to remove subsidy on petrol, saying it would worsen the suffering of Nigerians and that the so-called safety nets by government would be meaningless.
Under the umbrella of the Federation of Informal Workers' Organizations of Nigeria, FIWON, the workers said that government's reasons for the removal of subsidy were not tenable because the welfare of the majority of the masses was the reason for government existence.
General Secretary of FIWON, Comrade Gbenga Komolafe, FIWON who spoke on behalf of the organisations also faulted the planned hike electricity tariffs and wondered why government did not discuss the so-called safety nets with stakeholders and unions.
He said 'We reject unequivocally, the planned increase in the prices of petroleum products as well as the hikes in electricity tariffs. We demand that our right to social protection be respected without conditions while calling on the National Assembly to enact a comprehensive social protection law to cover unprotected Nigerians. We also demand that the federal government should massively invest in the construction of refineries not only for domestic consumption but also for export as several other developing countries including non-oil producers have done rather than wait forever for so the called private sector to do so.'
Falana urges lawyers to join fight against fuel subsidy removal
Human Rights Activist, Mr. Femi Falana, also called on lawyers across the country not to stay aloof in the fight against the removal subsidy on petroleum products.
He said this just as he condemned judges who have allegedly abused their judicial powers by issuance of questionable orders to the detriment of the society.
To make the legal profession more enviable, he charged lawyers and litigants alike to challenge courts to address the crisis of injustice and provide succor to the disadvantaged segment of the society.
This, he said, was the only way to ensure that security and welfare of the people remained the primary purpose of the government.
The former President of West African Bar Association (WABA) said these yesterday in Ibadan at the 2011 Law Week organized by the Nigerian Bar Association, Ibadan branch.
The erudite lawyer noted that lawyers in the country should not stand akimbo and leave the on-going fight against removal of subsidy on petroleum products to labour union and civil society organisations alone.
While presenting a paper entitled, An independent judiciary, panacea for a sustainable democracy in Nigeria, he enjoined 'lawyers not to leave the battle against fuel subsidy to the labour union and civil society organisations.
Lawyers must look at our lot, lawyers must be part of the battle to save our country from internal colonialists who are agents of IMF and World Bank, who want to inflict economic punishment on the Nigerian people. I am urging lawyers to be part of that battle in the interest of all of us because we can only practice law if there is peace and stability.'