The Minister of Finance and National Planning, Zainab Ahmed, has said the Federal Executive Council (FEC) has given approval for a planned summit of the government, leadership of all political parties and relevant groups to discuss and agree on the removal of petroleum subsidy.
Mrs Ahmed disclosed this on Thursday when she appeared before the House of Representatives Ad Hoc Committee investigating Premium Motor Spirit (PMS) subsidy.
She also said the government is planning to spend N3.35 trillion on subsidy in 2023, which will last till June of that year.
Mrs Ahmed said the idea of a national forum to take a decision on petroleum subsidy was suggested by the leadership of the National Assembly and that the arrangement for the forum is underway.
The minister said the federal government is spending N18.6 billion daily on PMS, and that it spent N6.2 trillion on subsidy between 2013 to 2021.
A whopping N3.35 trillion, she said, would be spent in the first six months of next year.
According to the minister, a further breakdown reveals that the government is paying N 283.2forn every litre.
“When we engaged with the leadership of the parliament, they recommended a national stakeholders forum that will bring all major stakeholders together, including all political parties leaders. We reported that at the Federal Executive Council (and)we got approval that it should be arranged and the government is looking at that.
“There is a need to have this as a national discussion. If we all as a nation agree that this PMS subsidy should go, then we all agree that it should go. It is not the president alone that is deciding, it is not the ministry of finance that is suggesting. I hope this is done very soon, that we take that decision,” he said.
Mrs Ahmed said the consensus is that the current subsidy regime is not sustainable. According to the minister, the arbitrage between the price in Nigeria and other neighbouring countries is responsible for the high volume of PMS consumed in Nigeria.
She said the government is equally concerned about the 64 million litres consumed daily by the country, adding that the consensus is that subsidy should be removed.
“The subsidy in the past has been investigated in the past by various bodies and groups, including the National Assembly. Including the executive. There have been several reports, and each of these reports has recommended that this subsidy regime is not beneficial and we should exit it. We are still holding on to it with all the deficiencies the subsidy regime carries.
“We have been making provision for PMS subsidy in the budget, We have taken it up over and over at FEC. There are instances when what is provided in the budget is exceeded because the circumstances are continuously changed. What is expended exceeds what is appropriated. NNPC insists that they have a responsibility as the last resort, and deducting from the revenue they generated,” she stated.
The Chairperson of the Committee, Ibrahim Aliyu (APC, Sokoto), however, faulted the daily consumption figure given by the Minister, describing it as overblown.
“If we look at average daily truck out of 64 million litres, in 2012, there was a report and total consumption was put at 31 million. It is very difficult to have a 100% increase within 10 years.
“If we are using a 42,000-litre capacity truck, if you divide it by 64 million, you will arrive at 1, 547 trucks daily, and if you take an average—simple division by 37 states, you have 41 trucks given to each state daily.
“The point, when you are talking of daily consumption, Monday to Monday, no public holidays….. In fact, during COVID, the consumption rate remains the same, I wonder how the minister can accept this kind of figure.
f”If you look at subsidy itself, is it for the common man? This subsidy is for the elite, not for the common man. This figure is overblown, and I feel that the ministry should have done due diligence to be able to arrive at a relative, acceptable consumption rate,” he said.
From Jonathan to Buhari: Other attempts to remove subsidy
In January 2012, former President Goodluck Jonathan announced the removal of subsidy. The announcement prompted protests across the country until the government was forced to reverse its decision.
Leaders of the APC who were then in different opposition parties, including the defunct Action Congress of Nigeria, Congress for Progressives Congress, All Nigeria Peoples Party and All Progressive Grand Alliance, protested against the plan.
The House of Representatives also opposedthe removal of the subsidy at the time. It held an emergency session which was convened on a Sunday and subsequently denied the Jonathan administration crucial support on the touchy policy. It called for the reversal of petrol retail price to the initial N65 per litre.
Following the protest that lasted some days, Mr Jonathan was forced to reverse the decision.
In 2020, during the COVID-19 lockdown, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, announced that the government had removedsubsidy.
However, with the spike in the price of crude oil, the government continued with the PMS subsidy.
In November 2021, the federal government announced its plan to remove the fuel subsidy and replace it with a monthly N5,000 transport grant for poor Nigerians.
The Nigeria Labour Congress in response fixed January 27 and February 2 for protests across 36 states against the subsidy removal. Again, the government reversed itself on removing subsidies.