*Kick against removal of subsidy until what FG’s telling the country is confronted frontally
*Alleges only 8 states benefiting directly from subsidy
*Notes lacuna in subsidy removal agenda hidden in untruth
*Suspension of fuel subsidy removal’ll result in more borrowings – Presidency, says subsidy removal not for 2023 elections
*Reps wade in, set up committees to probe current status, amount paid by govt, state of refineries
*NNPC presents N3trn subsidy bill for 2022 to FEC
*Council okays amendments to 2022 Appropriation Act
By Henry Umoru, Levinus Nwabughiogu & Johnbosco Agbakwuru, ABUJA
The Nigeria Governors Forum, NGF, has kicked against the proposed fuel subsidy removal.
According to the governors, fuel subsidy should not be removed until the Federal Government is confronted frontally on the issue.
The governors’ position came on a day the Presidency said suspension of removal of fuel subsidy would result in the country resorting to more borrowings.
This is even as the Nigerian National Petroleum Company, NNPC Limited, also yesterday, presented a proposal of N3 trillion to the Federal Executive Council, FEC, as the bill to meet the funding provisions of incremental fuel subsidy request in the 2022 budget.
But the House of Representatives promised to wade into the subsidy controversy, saying it was important to ascertain the actual volume of petrol consumed on daily basis to determine the level of subsidy and amount paid by the government.
Economy on the precipice — NGF
Speaking at a meeting with the leadership of the Nigeria Labour Congress, NLC, led by its president, Comrade Ayuba Wabba, in Abuja yesterday, Chairman, NGF and Ekiti State governor, Dr. Kayode Fayemi said the nation’s economy was currently at the precipice, stressing that if there must be removal of petroleum subsidy, the common people must benefit and not a few wealthy individuals.
According to Fayemi, it has become necessary for governors and the NLC to carefully verify all of FG’s estimates to ensure that whatever action is taken on subsidy will ensure the people get direct benefits, and not a few wealthy individuals and their cronies in the country.
Fayemi, who noted that only about eight states were currently benefitting directly from subsidy, raised alarm about the fraud that characterised consumption and distribution figures Nigeria was getting.
He added that the lacuna in the subsidy removal agenda was hidden in untruths by the administrators.
“Governors cannot ignore the economics of petroleum; all the countries surrounding Nigeria, including Niger, Mali, Cameroun and Ghana have their fuel pump price at the equivalent of a US dollar.
“Nigeria has a pump price that is far less than a dollar and is uncomfortable with the removal of subsidy until the challenge of what the FG is telling the country is confronted frontally.
‘Need for more research before further action’
“We need a partnership with the NLC to confront the challenges of what the NNPC is about, because there is a lot of fraud in the consumption and distribution figures that the country is getting and we can only move forward if the NLC engages all those who are knowledgeable in the field, such as PENGASSAN, to conduct a thorough research into the sector before any further action is taken on subsidy,” Dr Fayemi declared.
Fayemi, accompanied to the meeting by Plateau State governor and chairman of Northern Governors Forum, Simon Lalong, and Edo State Governor, Godwin Obaseki, told the labour leaders that subsidy removal had remained an on-going conversation not just among governors but also the country at large, emphasising that governors could not but be part of the solution providers in this onerous task confronting the nation.
‘Questions of accountability’
‘’There are raging questions of accountability associated with subsidy removal in the country and the NGF and the NLC can jointly work together to proffer solutions that heal the economy and provide succour to the Nigerian people,’’ he said.
Delivering his opening remarks at the meeting also attended by the TUC president and a host of other leaders of organised labour in the country, Dr Kayode Fayemi argued that the nation’s economy is on the precipice and that it has become necessary for the two groups to carefully verify all of FG’s estimates to ensure that whatever action is taken on subsidy, it would be the people that get direct benefits and not a few wealthy individuals and their cronies in the country.
In his remarks at the meeting, Edo State governor, Mr Godwin Obaseki, warned that “we have a choice of continuing to behave like Father Christmas (Santa Claus) or take concrete actions on a problem that is permanently with us rather than throwing away N3 trillion on subsidy.’’
He suggested that the nation could, in the interim, increase productivity to reduce imports and create jobs.
Obaseki also emphasised that the country would do well to revamp the power sector, which is virtually comatose because without power, “we will continue to throw millions of our people into unemployment, and ultimately, poverty, we should know that we have a country to manage.’’
On his part, Plateau State governor, Simon Lalong, recalled that the NGF had spent three years on this matter because “we cannot continue subsidising petroleum products.
“We must find options and create opportunities that address the hardships that stare our people in the face.’’
He said the painstaking work that led to the solutions the NGF was highlighting took a year to script together and warned that the fact that governors were sitting with Labour to resolve this contending issue didn’t mean that “as we leave the table we should go to sleep.’’
Governor Lalong said the teams from the two groups should immediately set out to work to find the light at the end of the tunnel.’’
On their part, Comrade Ayuba Wabba and the TUC president, Quadri Olaleye, stressed their lack of appreciation of the trust deficit that characterised previous negotiations, wondering why the subsidy issue had always been shrouded in lack of transparency on the part of government.
They argued that the conflicting figures that always came from the managers of the petroleum sector had always tended towards inefficiency, which labour and the people were completely opposed to.
Both the NGF and NLC, agreed that the lacuna in the subsidy removal agenda was hidden in the untruths bandied by the administrators, which they identified to be in the forefront of mismanagement of the proceeds accrued therein.
Suspension of fuel subsidy removal’ll result in more borrowings – Presidency
Speaking in an interview on Channel Television’s breakfast programme, Sunrise Daily, yesterday, the Presidency argued that suspension of subsidy removal would compel the country to subscribe to more borrowings.
Recall that Nigeria’s total debt is currently in excess of N38 trillion, and this has sparked negative reactions from Nigerians.
In fact, the Senate last year, approved some loan requests by the government, including $6.1 billion, another $16,230,077,718 and €1,020,000,000.
Special Adviser to the President on Media and Publicity, Femi Adesina, who stated this, said: “Head or tail, Nigeria will have to pay a price.
“It’s either we pay the price for the removal in consonance and in conjunction with the understanding of the people, but if that will not come, the other cost is that borrowings may continue, and things may be difficult fiscally with both the states and the Federal Government.
“You know how much could have been saved if the subsidy was removed and how it could have been diverted to other areas and spheres of national life. But if you do not go that way now – and I agree that it may not be auspicious to go that way, then we have to pay a price.”
According to him, oil prices have been fluctuating globally for years as a result of one reason or the other, particularly due to COVID since 2019. He stated that the price witnessed a decline as low as $30 per barrel, but later rose above $80 per barrel.
‘Not because of 2023 election’
Adesina also said the Federal Government did not suspend the removal of fuel subsidy because of the forthcoming 2023 elections, adding that it looked at the current rate of inflation and other economic index to arrive at its decision.
“As the minister of finance stated, the timing is not auspicious, inflation is still high. In the past eight months, we saw inflation reducing but the last month, it went up again; further consultations need to happen with all the stakeholders,’’ he said.
According to him, the government across the world is always mindful of its actions and decisions in a pre-election year.
He cited the developments in the United States and their impacts on the country’s poll, dismissing insinuations that the present administration’s proposal to extend the removal of fuel subsidy by 18 months was set as a booby-trap for the next president.
“That was not the intention, the intention was also stated, the timing is not right, it will exacerbate the hardship of the people, and the President genuinely cares.
“Politics is a part of our lives, but elections will just be one event in the life of the country. When elections come, they go, the country continues. This fuel subsidy, whether it stays or goes, is going to have a serious impact on the economy,’’ Adesina said.
NNPC presents N3trn subsidy bill for 2022 to FEC
Also yesterday, Nigerian National Petroleum Company, NNPC, limited presented a proposal of N3 trillion to the Federal Executive Council, FEC, as the bill to meet the funding provisions of the incremental fuel subsidy request in the 2022 Budget
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, who disclosed this while briefing State House correspondents at the end of the cabinet meeting presided over by President Muhammadu Buhari at the Council Chambers, Presidential Villa, Abuja, yesterday, said FEC considered the request to make additional funding provision to enable government meet incremental fuel subsidy payment in the 2022 budget.
She recalled that only N443 billion was currently available in the 2022 budget meant to accommodate subsidy from January to June.
The Minister said with the realities on ground, including the present hardship faced by Nigerians and the lack of structures to support subsidy removal, the NNPC made a request for N3 trillion from the Ministry of Finance for 2022.
She said the request was considered by Council which directed the ministry to approach the National Assembly for an amendment to the fiscal framework as well as the budget.
The minister also revealed that council approved an amendment to be transmitted to the National Assembly to repeal clauses 10 and 11 concerning the Economic and Financial Crimes Commission, EFCC, and the Nigerian Financial Intelligence Unit, NFIU, operations in 2022 budget and restored what the lawmakers had deleted, amounting to N103 billion.
Mrs. Ahmed said that council approved that the National Assembly restored the N103 billion slashed from the budget for the provision of critical infrastructure.
She said: “We also presented to Council today (yesterday) a request for Council’s consideration to make additional funding provisions to enable us meet incremental fuel subsidy request in the 2022 budget.
‘’You’ll recall that in the 2022 budget, as appropriated, we have made a provision of N443 billion for subsidy for January to June.
“Having taken into account the current realities; increased hardship in the population, heightened inflation, and also that the measures that needed to be taken to enable a smoother exit from the fuel subsidy are not yet in place, it was agreed by Council that it is desirable to exit fuel subsidy.
“The Nigerian National Petroleum Company, NNPC, has presented to the ministry a request for N3 trillion as fuel subsidy for 2022. What this means is that we have to make an incremental provision of N2.557 trillion to be able to meet the subsidy requirement, which is averaging about N270 billion per month.
“In 2021, the actual under-recovery that has been charged to the Federation was N1.2 trillion, which means an average of N100 billion, but in 2022, because of the increased crude oil price per barrel in the global market, now at $80 per barrel, and also because an NNPC’s assessment is that the country is consuming 65.7 million litres per day, now we’ll end up with incremental cost of N3 trillion in 2022.
“So, this has been considered by Council and we’ve also been asked to approach the National Assembly for an amendment to the fiscal framework as well as the budget, to also further discuss with FG on how to make provisions for this and also how to rationalize this expenditure.
“The second memo we presented to Council today (yesterday) has to do with a request for approval of the 2022 Appropriation amendment. If you recall, when the President signed the 2022 Appropriation into law on December 31, he had raised some concerns that he had in some of the provisions in the budget and had indicated that he will be submitting an amendment proposal to the National Assembly for them to effect improvements in what has been done to the budget.
“So, today (yesterday), Council took that amendment proposal and I just want to report that part of the requests that Council has approved today is for the National Assembly to repeal clauses 10 and 11.
‘’Clause 10 is referring to a provision that has been made that will enable the EFCC and NFIU be able to take 10% of whatever collections they recover.
“We’re asking for that to be repealed because this is in direct contrast to the Acts of these two agencies and also it is in contravention of the Fiscal Responsibility Act and the Finance Act 2021.
“Clause 11, on the other hand, is a provision that has been made that says that the Nigeria embassies and missions are now authorized by this Appropriation Act to expend funds allocated to them under capital compon-ents without the need to seek approval of the Federal Ministry of Foreign Affairs.
“This again, in a view, and Council agreed, is inconsistent with financial regulations and provisions of the Public Procurement Act. So, we are asking for this to be repealed.
“Council also approved that some of the changes that were made in the Appropriation Act, totaling N103 billion be restored and examples of these are N22 billion provided for sinking fund to mature bonds that will be ready for payment in 2022 in the Nigerian domestic market, and also N12 billion for counterpart funding required for the various rail projects and N189 million to be adjusted also in the budgets of the Ministry of Transport, Secretary to the Government of the Federation and the Head of Service.
“These are projects that are provided in these ministries that are completely unrelated to their mandate, so implementation will be a problem. Also, N5 billion to be restored for non-regular allowances of the Nigerian Navy, N15 billion to be restored for the regular allowances of police formations and police commands and several others that Council looked at in detail.
“So, there’s a detailed schedule of this N103 billion the President will be formally conveying to the National Assembly to restore the adjustments that were made.’’
Fielding questions on the vagueness of the quantity of petroleum products consumed in the country and how the planned N3 trillion subsidy budget would be funded, Mrs. Ahmed said more works would be done on the proposal.
Reps wade into subsidy controversy
Meanwhile, the House of Representatives promised to wade into the controversy surrounding the fuel subsidy regime in the country, saying it was important to ascertain the actual volume of petrol consumed on daily basis in the country to determine the level of subsidy and amount paid by the government.
Speaking at yesterday’s plenary, speaker of the House, Femi Gbajabiamila, said it had become imperative to conduct the investigation.
He also stated that the House would probe the current state of the nation’s four refineries and the cost of fixing them.
Gbajabiamila said many figures as to the fuel consumption by Nigerians and the actual amount paid as subsidy had been making the rounds, adding that the House would not rely on such figures.
He said it was only when thorough investigation was done on subsidy and the state of the refineries that justification could be established on their removal or retention.
Consequently, the speaker announced the setting up of two committees, chaired by Abdulkadir Abdullahi (APC, Bauchi) and Engr. Ganiyu Johnson (APC, Lagos), to investigate the issues.