Fuel subsidy splits National Conference

N3.4 trillion has been spent in two years

The debate on the floor of the National Conference went into a frenzy on Monday following a recommendation by the Committee on Public Finance and Revenue that petrol subsidy be removed.

The Committee Chairman and former Kebbi State Governor, Adamu Aliero, had, while presenting a report to the Conference, kicked against the continued payment of subsidy on petrol.

In the controversial report, Mr. Aliero told his colleagues that the fuel subsidy had become a drain on the country’s scarce resources.

He noted that the government paid a total of N2.3 trillion as subsidy in 2012 and N1.3 trillion in 2013, adding that these accounted for 4.8 per cent of the country’s Gross Domestic Product, GDP.

“The subsidy regime encourages corruption; it is also a disincentive to investment in the downstream sector of the petroleum industry,” he said.

Mr. Aliero added that Nigeria had the lowest pump price of petrol compared with other sub-Saharan African countries.
Responding to the report, delegates representing labour and civil society groups called for a total rejection of the recommendation for the removal of fuel subsidy.

A paper jointly issued and circulated by the coalition reads in part, “The recommendation of the Public Finance Committee in Section 6(7) and on page 58 of its report with respect to total removal of fuel subsidy; be rejected in its entirety.

“The recommendation as it stands, if approved by Conference and implemented by government, is capable of inflaming passions and provoking another round of crisis comparable to if not of a greater dimension to the anti-fuel subsidy uprising of January 2012.

“As a matter of urgency, government should put in place appropriate tracing, tracking and metering technology to determine the accurate daily consumption rate for refined products. Government should put in place measures to ensure the acquisition of adequate domestic refining capacity within a two-year period.

“Government should demonstrate zero tolerance for corruption by bringing to book, past and present culprits involved in the gross mismanagement of fuel subsidy regime.”

While majority of South-South delegates, who spoke, supported the total removal of fuel subsidy, Northern delegates opposed the move vehemently.

Some of those who spoke from the South-South insisted that the subsidy regime does not benefit them since petrol was sold in that region at over N150 per litre.

A delegate from Cross River State, Orok Duke, spoke passionately on the fact that petrol subsidy only benefited people in the North and South-West Nigeria.

According to him, Nigerians from the Niger Delta region and particularly Cross River State do not benefit from the money spent on subsidy.

Mr. Duke said, “Not even in Calabar do we have people sell fuel at N97 per litre. We are living in denial. Let us be factual about this issue. There is nothing like subsidy where I come from.

“Cross Riverians are not benefiting from subsidy. It is beneficial to the South West and the North. Free importation of kerosene from NNPC, please. Let us do the right thing and allow anybody who wishes to import kerosene to do so and the market forces will take its due course and bring the price down.”

Sergeant Awuse, a delegate from Rivers State, also spoke strongly in support of Mr. Duke’s position.

He said, “If you say that Nigeria is benefiting from the subsidy, I think we must go back to the drawing board. As we speak, some people are in court for stealing subsidy funds. This shows that the subsidy is not benefitting the masses. We must look for the interest of the majority.”

But Ahmadu Ali, a North-Central delegate would not support outright removal of subsidy on grounds that it could upset the masses.
Mr. Ali had argued that if fuel subsidy is to be removed, it must be done in phases.

He said, “We have a situation where instructions from the President are not being obeyed by the NNPC. This is a major problem in the country. As we speak, subsidy had been withdrawn from kerosene but the NNPC is still paying and nobody knows where they are getting the money.”

ABC Nwosu, a delegate from Anambra State, noted that apart from Canada, Nigeria has the largest deposit of bitumen in the world.

He recommended that a Venture Capital Fund be created to ensure that identified mineral resources were exploited and the funds brought into the national treasury.

Mike Ozekhome, a Federal Government delegate, opposed the recommendation for the removal of oil subsidy, adding that even when a litre of fuel was sold for 25 kobo, people were still calling for subsidy removal.

“Mr. Chairman,” he began, “the greatest irony of our time is when a farmer tries to measure a piece of yam he gives it to his family to eat. This is an attempt by the elite to continue to hold our poor by the jugular.”

Isa Aremu, one of the representatives of labour unions, while kicking against the calls for subsidy removal, drew Conference attention to the controversial pension law in Akwa Ibom State.

Mr. Aremu condemned the law in strong terms, saying that it would further impoverish the people of the state.

He, however, insisted that the remuneration and pension for former leaders should be regulated by the Revenue Mobilisation, Allocation and Fiscal Commission, RMAFC.

He said: “Just some days ago, the governor of Akwa Ibom State signed a law that would enable him to earn over N200 million as pension. In a state where the minimum wage is still N18, 000 per month, it is sad to see a situation where our governors are taking so much money at the expense of the citizenry. Mr. Chairman, what I am saying is that we should control what political office holders in the country receive.”