By Udeme Clement

Agitation for the removal of over N2 trillion spent by the Federal Government on subsidy on petroleum products to maintain a regulated price regime in the last four years took a new dimension recently, as state governors said the new minimum wage of N18,000 would be paid on condition that subsidy is removed.

Also, some stakeholders are calling on the National Assembly to pass the Petroleum Industry Bill (PIB) that has been in the House since 2008, to enhance full deregulation of the downstream petroleum sector, even as non-passage of PIB is hindering listing of NNPC on the floor of Nigerian Stock Exchange (NSE).

Mr. Femi Olawore

Speaking on the need for government to remove fuel subsidy and channel the money into developmental projects across the country, the executive secretary, Major Oil Marketers Association of Nigeria (MOMAN), Mr. Femi Olawore, said subsidy is the bane of economic growth and development. He said, “It appears the states do not have the money to pay the new minimum wage now.

Second, the Federal Government does not have the money to continue paying fuel subsidy because it is an unnecessary drain on the revenue of government. MOMAN supports the immediate removal of subsidy to invest in other developmental products to grow the economy holistically.”

He added, “the question which must be answered is, who would ensure that money from subsidy is used for tangible projects. Four groups are responsible for this. First, it is the duty of the National Assembly to ensure that government invest in developmental projects. The second group is the labour union, which must check government to deliver on its promise.

The civil society is the third group that should through constant advocacy with non-governmental organisations (NGOs) monitor government to ensure adequate utilisation of money removed from subsidy.

The media is the fourth group that must play a vital role in ensuring that government delivers on its promise of embarking on developmental projects for the good of the masses. These four groups must hold government accountable.”

Speaking further, he said “government should remove subsidy and at the same time meet the demands of labour to provide public goods. If government does not remove subsidy, it would affect the entire economy because only rich men enjoy subsidy and not the masses.

The four groups must make government responsive by giving a time frame to work and what it should do with the money from subsidy.”

Olawore noted: “Another problem is the fact that the refineries are inactive. There is an urgent need for government to fully deregulate the downstream sector for the economy to develop. The regulatory frame work for deregulation is in the Petroleum Information Bill (PIB) before the Senate.

The non-passage of the bill means government can’t deregulate which is too bad for the economy. Passage of the bill would free the market for serious investors to come in. Today, some players are in the industry because government is paying subsidy. Once subsidy is removed, such players would leave for serious investors to come in. I am appealing to the Senate to pass the bill for optimum economic benefits now and in the long-run”.

Reacting to the scarcity of kerosene in the country, he explained, ‘MOMAN just started receiving kerosene from NNPC about three weeks ago. Before then, for two years we did not receive anything and did not feel the impact because when we collected the first consignment, the National Association of Road Transport Owners withdrew their services.

Government should remove subsidy to rebuild the roads for effective distribution of products to end-users across the country. There is need to sustain the supply of kerosene in the short-run while NNPC must flood the market with the product and in the long-run there is need for deregulation.’