FUEL SUBSIDY MUST GO, SAY ANYAOKU, JIBRIL AMINU
• Nigerian national team
For former Commonwealth Secretary-General, Chief Emeka Anyaoku, removal of fuel subsidy would correct distortions in the economy. But former Justice Minister, Prince Bola Ajibola disagreed, saying the removal is an explosive issue that must be handled with utmost care and caution.
Chief Anyaoku told shareholders of Orient Petroleum Resources Plc, during the Annual General Meeting (AGM) in Awka, Anambra State, at weekend, that it would reduce pressure on the exchange rate. As Anyaoku spoke, vice-chairman, Senate Committee on Health, Senator Arthur Okowa said subsidy on kerosene would go in 2014. Speaking with Daily Sun in Abuja, Okowa, who is also a member of the Committee on Gas, said Petroleum Minister, Mrs. Diezani Allison-Madueke, told a panel at an interactive session that kerosene subsidy would be removed in 2014
Anyaoku said during the AGM that the planned removal of fuel subsidy by the Federal Government 'is expected to help correct a lot of distortions in the economy, including the pressure on the exchange rate.' His support came just as the chairman of the Joint Action Committee (JAC) of trade unions in Anambra State University (ANSU), Comrade V.N..Asoegwu, described the planned fuel subsidy removal as an evil proposal that must be resisted by all well-meaning Nigerians. Asoegwu, who spoke in Uli while addressing the South-East and South-South executive council meeting of National Association of Academic Technologists, accused the Federal Government of being insincere over the cost of subsidy and who the beneficiaries were.
However, Anyaoku in his address at the AGM noted that the Petroleum Industry Bill (PIB) would make for increase in crude oil production and topple the 1.9 and 2.47million barrels per day registered in 2009 and 2010 respectively.
Anyaoku, who is Orient Petroleum chairman, commended President Goodluck Jonathan, noting that the strength of the new economic team he has set up was a clear demonstration of the priority being placed on the improvement of the nation's economy. He told investors that the company has obtained an Environmental Impact Assessment (EIA) certificate from the Federal Government for its yet to be completed refinery.
Assuring that the company's 55,000 barrel per day refinery under construction at Otuocha in Anambra State would be ready by 2012. He said, 'The company is expected to complete construction of the refinery and commence sales at the end of 2012, and thereafter, the Board of Directors will review overall result prior to recommending a dividend.'
Meanwhile, Asoegwu, who is also the chairman of Senior Staff Association of Nigerian Universities (SSANU), ANSU chapter while buttressing the alleged insincerity of government said, 'in the beginning, it was put at N4.3 trillion and now it is put at N1.2 trillion. Even the Senate is tinkering with the idea of probing to know who the beneficiaries of the fuel subsidy are.
'My position is that even if it costs the Federal Government up to N2 trillion to subsidize petroleum products, so be it, after all it is the only benefit the common man enjoys from our national wealth.' On the planned removal of kerosene subsidy, Senator Okowa said already, government has informed the National Assembly in the 2012-2015 Medium Term Economic Framework (MTEF) and Fiscal Strategy Paper (FSP) that it would remove oil subsidy as from 2012. Said Okowa: 'The Minister for Petroleum Resources did make some clarifications before the Gas Committee that kerosene is not going to be deregulated for now. She said the subsidy removal is not going to affect kerosene at the moment, possibly not until 2014, while they are hoping to develop the Liquified Petroleum Gas, the cooking gas, so that it becomes cheaper.
'They are trying to reform the process and take some actions that would make it available and make it cheap enough so that we won't need to use kerosene but we can now use cooking gas. These are plans we need to know but Nigerians were probably not aware of this until she probably said so. Government is apparently not talking enough.
'Government needs to come out to give us lot of information on subsidy removal. We need to have stakeholder discourse and input before actions are taken.' Okowa called on government to disclose to the public the audited accounts of the Nigeria National Petroleum Corporation (NNPC), Petroleum Products Pricing Regulatory Authority (PPPRA) as well as that of Petroleum Products Marketing Company (PPMC).
'My worry is that the entire capital projects for 2011 would be financed with borrowed funds from the banks in the country. That is a major challenge. 'I am sure that most people never knew, until this motion came up, that government was likely consuming above N1trillion on subsidy in a year. Last year, they spent a little over a trillion and this year, we have that one trillion. 'It, therefore, means that the subsidy on fuel alone is equivalent to the entire capital budget for all sectors including education, health and all other forms of social services including critical infrastructure of power and roads.
'So, the question is this: Is it sustainable? These are things we need to put on the table to discuss. I feel that the federal government needs to come in with all information to Nigerians without holding back on any. 'They should let us know exactly what is going on and also, letting us know whether the accounts of the NNPC, PPPRA, PPMC have actually been audited by firms as related to the subsidy; whether their accounts have actually been audited by firms that we can trust so that they let us know exactly today how much fuel is actually coming in into this country, how much fuel is being refined locally,' he noted.
Meanwhile, Prince Ajibola has cautioned the Federal Government over its decision to remove the fuel subsidy.
He said that apart from pauperizing the common man, such removal is an explosive issue that must be handled with utmost care and caution. Justice Ajibola warned that with the Jos and Boko Haram crises still unresolved, Nigeria is already sitting on a time-bomb, Therefore, he emphasised Nigeria could not afford any other crisis that might arise over removal of oil subsidy. Ajibola spoke to Daily Sun in Abeokuta, Ogun State. He warned that it would be foolhardy and self-destructive for the government to go ahead and remove the subsidy without proper consultation with all the stakeholders.
According to him, the Federal Government is holding the wealth of the nation in trust for the people and if the people insisted that the oil subsidy should not be removed, so be it, he stressed. Justifying the proposed removal of subsidy, spokesman of the NNPC, Dr. Levi Ajuonuma, said the the planned deregulation of the downstream sector of the oil and gas industry is a veritable avenue for increased investments and job opportunities.
The Group General Manager, Group Public Affairs Division of the NNPC, Dr. Ajuonuma, told journalists at the weekend in Lagos that the removal of fuel subsidy would enable government plough back the huge annual subsidy on provision of some basic infrastructure as well as facilitate the entry of private investments in refineries, petrochemicals and allied products.
'As a people, we must learn to open our eyes to current realities and embrace the opportunities that a deregulated downstream sector of the oil industry has on offer for us all. Removal of subsidy means that government would have more funds to channel into the provision of some identified vital infrastructure and social welfare packages for some vulnerable groups like pregnant women, children as well as unemployed youths. All these are captured in the post-deregulation Social Safety Net scheme,'' Ajuonuma stated. He said special community public work programme with competitive reward package is being designed to help keep youths, especially in non-urban areas engaged and help them resist the lure of the rural-urban migration.
'It is common knowledge that about 10 years ago government gave licenses to some private investors to build refineries and one decade after none of them has come on stream. The reason for this is very simple: No investor would enter a market where government prescribes how much the products should be sold; in fact, such a venture is not even bankable. But under a deregulated and liberalised regime, as we have seen in the telecoms, aviation and even media businesses, private initiatives and ventures help to stimulate the much needed competition and growth,' Ajuonuma argued.
He called on the Nigeria Labour Congress (NLC), the Trade Union Congress (TUC) and all other bodies opposed to the removal of subsidy to give government the benefit of implementing the deregulation programme and monitor how the proceeds would be used for the benefit of the citizenry.
Reacting to the proposed removal of the subsidy, a former minister of petroleum, Prof. Jibril Aminu, has said there was no way the Federal Government could continue with oil subsidy, insisting neighbouring countries were benefiting more. Aminu served in the Gen. Ibrahim Babangida (retd) regime. Senator Aminu, who represented Adamawa Central Senatorial District, in the sixth Senate, insisted, however, that the NNPC must bring the figures out now for Nigerians to know what they were losing by way of subsidy. Aminu told Daily Sun in Abuja that the oil subsidy must not only be done in phases but just like what the Petroleum Trust Fund (PTF) was able to achieve during the military, there must be specific areas the money would be channeled to, adding that trillions of naira was too much to be wasted on subsidy when it could provide roads, quality education, hospitals and other essential social amenities.
'The British say that 'it is not what you do but how you do it. It is not what you say but how you say it'. I am convinced that with the way things are going now in this country, we cannot continue with this oil subsidy indefinitely. It is impossible considering the amount we are spending. Look at the figures. We all must have done some science while in school. How much is it costing the country? 'When I was the petroleum minister long time ago, it used to cost about N100 million to convey the subsidy, not even the subsidy itself but to deliver it. When you look at it, it is not something that we can sustain and I believe that the NNPC has a responsibility to bring the figures out now and let Nigerians know what we are losing by way of this subsidy. Show our people what is happening.
'I remember that at the time of former president Obasanjo, they had thought that N150 billion would do, N150 billion is a lot of money to use as subsidy. They thought it would do and that is; Federal Government will pay half and state governments would pay half. Now I hear people dangling figures like N1 trillion per annum. This is money which I know is said to be going to certain Nigerians I believe under the downstream sector. This money could have been used to develop the educational system, the roads, agriculture, e.t.c. now is going to one sector only.
'If this energy was used 100 percent for the benefit of Nigerians, that would have been ok but we all know what happens that a lot of Nigerian neighbours rely on the Nigerian subsidy and a lot of very important people participate in smuggling and this is what they call arbitrage which is where people get free money and develop their racket,' he added.
In a related development, the Initiative for Peace and Industrial Harmony, says it wants to mediate in the impasse between the government and labour unions.
The group, mainly former labour leaders, activists and former government functionaries, said they believed putting the issues on the table and arriving at a decision would be beneficial to Nigerians. Spearheaded by Dr. Timiebi Koripamo-Agary, former permanent secretary, Ministry of Labour and Productivity, and Mallam Salihu Lukman, former assistant general secretary, Nigeria Labour Congress (NLC), the group said 'current opposition to subsidy withdrawal as expressed by Nigerians, needs to be engaged and is the entry point to negotiations.'
Briefing journalists in Abuja at the weekend, Lukman said the government, the NLC and other interested parties, had already been invited for the meeting that would be chaired by the Senate Committee on Petroleum.