April 26, 2022

N4trn Bill: Petrol subsidy payment unsustainable — Ex-NNPC official


By Obas Esiedesa

The growing amount of money needed to pay for petrol subsidy that would see the Federal Government spend N4 trillion in 2022 is unsustainable, a former Executive Director, Corporate Planning and Strategy, Nigerian National Petroleum Corporation (NNPC), Dr. Tim Okon has said.

Okon who spoke on a national television programme monitored by Energy Vanguard yesterday said high cost of crude oil and huge smuggling activities have made Nigeria the sole supplier of petrol to neigbouring countries.

The Federal Government has so far spent N396.72 billion on petrol subsidy in the first two months of 2022 after spending N1.573 trillion in 2021. It has also received approval from the National Assembly to spend N4 trillion on subsidies in 2022.

Dr. Okon pointed out that the situation has become dire since the government had to borrow money to pay for the subsidy, increasing the budget deficit in the process.

He noted that in the face of rising budget deficit the government needs to raise taxes to boost revenue, adding that petroleum products are pollutants that should be taxed and subsidized.

According to him, just like the government imposed taxes on fizzy drinks, taxes should be imposed on petrol.

Also Read:

“Any product with harmful social effects that is a pollutant ought to be taxed. A good example is the taxes on fizzy drinks. You cannot have a pollutant without any form of taxes instead we are subsidizing it. Go to parts of the Niger Delta and you will see what oil has done. Somebody needs to clean this up.

“To clean it up we need to tax petroleum because we must deal with the problem of the negative economic consequences of oil and I think that is where the loophole needs to be closed by taxing and removing this subsidy that is causing huge environmental damage to our country.”

“We are just kicking the ball down the road”, he added.

But a former General Secretary of the Nigerian Labour Congress, Dr. Peter Ozo-Ezon disagreed, saying the argument on petrol smuggling was begging the issue and a cover up for government failure to do its duties.

He pointed out that it was the duty of the Federal Government to secure Nigeria’s borders as part of its duty to secure the lives and property of Nigerians.

“If we have a failure of governance that is their problem, part of the function of government, properly constituted, is to be able to secure its borders. So if we cannot secure our borders, if we cannot ensure that goods produced here are not just taken abroad freely then that is a matter of the collapse of governance”, he added.

Vanguard News Nigeria