Beneficiaries of the controversial N1.4trillion fuel subsidy funds, recently identified by the National Assembly as the notorious cabal holding the country to ransom, may have browbeaten President Goodluck Jonathan into recanting his earlier claim that they were responsible for the country’s economic woes.
During his second media chat, televised live on major TV channels in the country, on Friday, the president claimed the position of a Senate joint committee, which probed the management of fuel subsidy funds, was largely misconstrued by Nigerians.
In what clearly contradicted what administration officials have claimed all along, Mr. Jonathan said the people labeled cabal by the lawmakers and other Nigerians were actually law-abiding citizens carrying out their legitimate businesses.
The president said, “There are a lot of misconceptions about this issue of cabal. Most of the names of marketers that were advertised during the Senate hearing on the management of oil subsidy, who were supplying various volumes of petroleum products and had some transactions with government, are our own marketers who were doing genuine business.
“So, when we talk about N1.4trillion, it is not as if someone pocketed the money.
“No, that is wrong. There are companies, like MTN and Glo, that do business in Nigeria and make gain, and one is not saying they are a cabal taking money that does not belong to them. These are people that use their money or borrow money to import petroleum products into the country and government paid them. So, it is wrong to say that they are a cabal.”
But in another breadth, Mr. Jonathan contradicted himself shortly afterwards, admitting that the petroleum product import business was fraught with corruption and mismanagement.
“The issue is that if there are no leakages in the system, the amount of money they use for subsidy might not be up to that,” he said. “It looks so untidy. But, we are looking into it. It might be correct, or it might not be correct to create the impression that there is a cabal that stole N1.4trillion.”
On the contractors who failed to deliver on the job of Turn-Around-Maintenance of the refineries, the president said he was not in a position to apportion blame because the contractors have different levels of competencies. “That is clearly a very unintelligent argument,” an angry oil industry player told Premium Times earlier today. “We are saying people took money but did not deliver on the jobs they were given, and a president is saying he could not indict anyone because contractors have different levels of competences. What a dumb response?”
Mr. Jonathan was one of the first to blame the crisis in the supply of petroleum products, which has resulted in an unwieldy subsidy burden, on a cabal that is profiteering on the corruption in the system.
However, it was gathered that no sooner than the Senate President, David Mark, threatened at the opening of the probe to unmask members of the cabal, that the persons involved, most of who were known financiers of the ruling Peoples Democratic Party (PDP) and the president’s election campaigns, began to pressure the president to help clear their names.
It was gathered that Mr. Jonathan had to seize the opportunity of the chat to clear the marketers of any complicity, majority of whom the Senate declared did not meet the approved criteria to be awarded licenses to import fuel into the country.
The President, who struggled during the session to buy support for his controversial plan to cut subsidy, said Nigerians should stop focusing on governmental corruption alone, as graft is endemic in all aspects of our national life, including the private sector.
He said his administration was pursuing the deregulation of the petroleum sector to as a way of checking corruption and saving the economy from collapse.
“Corruption is not endemic in government circles alone,” he said. “It is everywhere, even in the private sector. The primary duty of government is to fight corruption. We are doing our best, and will continue to do our best.
“But, when we link corruption to the fuel subsidy, our challenge is to solve that problem, because when we continue to subsidize the petroleum products, there are so many loopholes that could be exploited for corrupt purposes. The issue of deregulation is to remove some of these areas that expose the whole system to corrupt practices. Deregulation is the way to fight the monster called corruption in Nigeria.
“The burden is on the President, the governors and the ministers to manage the country’s resources. If we must survive as a nation; if our economy will not be allowed to crumble; if we must create jobs for our young people as well as create wealth for Nigeria, we have to deregulate the oil sector.”
Denying that country is broke as a result of the huge expenditure on fuel subsidy, the president said as a responsible entity, the Federal Government must be prepared to save for the future, pointing out that if the country fails to manage her economy well, it would soon be broke and unable to meet its obligations to Nigerians.
Mr. Jonathan disclosed that the country’s debt profile was mounting and becoming increasingly unsustainable, saying there was an urgent need to halt borrowing and save the economy from collapse.
He said, “We will no more borrow to continue to run government. If we continue to borrow, our foreign reserves will continue to go down and the value of our currency will flatten out, while our capacity to handle other developmental projects will not be there.
“It is wrong to say that every money generated must be shared, not minding the future. If we do not deregulate, and we continue to go the way we are going, in the next two years, we might run into trouble. Experts say our oil reserves may not last more than 50 years. We must begin to look for other options for the country to generate income. We must go back to agriculture and manufacturing. We do not want to leave liabilities for others to come and pay.”
Mr. Jonathan said government was gradually disengaging from the running the refineries. However, he continued, the administration would keep 20-25 percent stake in the new refineries being planned in conjunction with the Chinese, adding that immediately the refineries become functional, government would divest from them.
“Government wants to see the NNPC(Nigerian National Petroleum Corporation) completely pull away from trading in petroleum products and managing of refineries, while NPDC (Nigerian Petroleum Development Company) will be competing with other international oil companies to operate and build reserves,” he said.
He said the benefits of the planned deregulation on the economy would begin to manifest when new investors begin to come into the sector by the middle of next year, assuring that though deregulation would negatively impact the lives of the people, the pains would only be marginal and temporary.
“Government emphasis is more on the issue of deregulation than subsidy removal,” the president explained. We have to deregulate completely to enable people to join in building refineries and export refined products. We need to add value to our crude oil and create jobs for Nigerians.
“For every barrel of crude oil that is refined outside Nigeria, we are adding value and creating jobs for other economies. All have agreed that as a nation we must look inwards and work to create jobs for our children. If we deregulate, between 12-18 months we will begin to see the benefits. In the next four to five years, if we do things properly things will change. We want to make sure that even before we leave, ordinary Nigerians will not need standby generators to function,”
On the Petroleum Industry Bill (PIB), the president expressed regret that the last National Assembly was unable to pass it, adding however that his administration was working hard to get the lawmakers and the various stakeholders look at areas of disagreement and ensure that the law is passed by the first quarter of next year.