Why we back FG on petrol subsidy removal by 2022 – IPMAN, others

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The Independent Petroleum Marketers Association of Nigeria (IPMAN), said yesterday, that its support for the Federal Government over the planned removal of subsidy on Premium Motor Spirit (PMS), stems from the realization that the Petroleum Industry Act (PIA) signed into law by President Muhammadu Buhari on August 16 makes no provision for subsidy.

Besides, IPMAN President, Chinedu Okoronkwo, told the News Agency of Nigeria (NAN) yesterday that his association has consistently “advised the government to remove petrol subsidy because it is not in the interest of development of the downstream sector.”

But the National Association of Nigerian Students (NANS) threatened, yesterday, to shut down the country should the Federal Government go ahead with the planned fuel subsidy removal.

The students’ body also rejected the government’s plan to pay N5,000 transport allowance to 40 million Nigerians to cushion the effect of soaring fuel prices.

Okoronkwo, in the NAN interview, said: “We welcome the decision of the government to stop subsidising petrol by 2022 and we are hoping it will attract more investments to the sector, especially with the passage of PIA.”

He added: “What we want is that a level playing field be provided for everyone in the sector to encourage competition once the subsidy is removed.”

Also speaking on the issue, the immediate-past President, Major Oil Marketers Association of Nigeria (MOMAN), Tunji Oyebanji, said continued subsidising of petrol was not sustainable in light of current economic realities.

He said the 2022 deadline was realistic and its impact might be mitigated with the coming on stream of the 650,000BPD Dangote Refinery, Bua Group Refinery, Waltersmith Refinery and other modular refineries.

Oyebanji, who is the Managing Director of 11 Plc, however, faulted the plan to replace the subsidy with cash transfer to Nigerians due to lack of a reliable data base in the country.

“In my personal opinion, I am of the view that such funds should be channeled to areas like education and mass transportation that would be accessible to ordinary Nigerians,” Mr Oyebanji said.

An oil and gas expert, Wilson Opuwei, said the conversation about fuel subsidy in Nigeria “should have been a thing of the past because it was an obvious wastage of the nation’s resources”.

Mr Opuwei, who is the Chief Executive Officer of Dateline Energy Services Ltd., maintained that the elite were the major beneficiaries of the fuel subsidy regime.

He said: “We should let market forces determine the price of petrol and other products, not the government dolling out subsidies with funds that we don’t even have.”

 

NANS rejects proposed fuel price hike, threatens shutdown

Declaring its position on the issue yesterday, the National Association of Nigerian Students (NANS) threatened to shut down the country should the Federal Government go ahead with the planned fuel subsidy removal.

Addressing journalists in Abuja, NANS President, Comrade Sunday Asefon, said the union would mobilise its 41 million members across the country to protest what he branded a “strange proposal.”

The present economic realities in the country, Asefon said, made it wrong for the government to contemplate something as critical as deregulating the petroleum sector “without thinking it through, without consultation and without a robust debate.”

He described the move as a plan by the government to get money at all costs to squander and finance the ostentatious lifestyles of public officers and senior civil servants, adding that any attempt to aggravate the economic woes of Nigerians would not only be unconscionable but reckless.

“Nigerians are really suffering. We are in dire socioeconomic straits. We are weeping in our hearts and souls. We are dying in silence. We feel the agony and anguish because we are practically involved,” he said.

Continuing, he said:It will amount to testing the patience of Nigerians. And we wish to warn against it. The country is very stretched and tensed. In case the government is not aware, we are passing them this intelligence free of charge now. Again we advise: let the government not stretch it further.

“The consequences will be dire. The people are already flamed. Mendacity will beget mendacity

NANS is happy that the organised labour and civil society groups have all rejected the proposal.

”We shall ensure that the entire country is shut down and paralysed should the Federal Government proceed with its insensitive plan of deregulation, or even any further increase in the pump price of fuel. We have had enough.

”We know that neo-liberal and imperial economists will soon emerge to confuse themselves with some well- rehearsed stale analyses and commentaries.”

“It is therefore very strange that the Federal Government could contemplate the removal of fuel subsidy now. The four refineries are not functioning, and if they are functioning at all, it is at a near zero level. There is a zero consultation with stakeholders to even consider issues around deregulation and why it should or should not be. The survival of Nigerian workers and their wards is yet to be discussed, yet a date that may take lives out of them has been fixed.

”Furthermore, inflation is already passing a skyrocketing level. So we may need to find a word to describe the kind of inflation that will be experienced if the pump price of PMS goes above 200 percent. In fact, we are very convinced that the Federal Government is acting impulsively on a matter as sensitive as this. And our conviction is based on many things that cannot just add up. Beyond the issues already raised, let us consider the following economic confusions:

”In the 2022 Appropriation Bill, the FG already provided for fuel subsidies. One then wonders why it will provide for what it plans to eliminate.

”Upon which data did the Honourable Minister of Finance, Budget and National Planning determine that only 40 million Nigerians are vulnerable? And what is the definition of vulnerability in our socioeconomic context?

“Where does she intend to generate the money which will be paid to those 40 million Nigerians since there is no provision for it in the 2022 Appropriation Bill?

”Is it not a very strange economics to rob the poor to pay the poor even lower? In which economic sense or theory does 5000 the inflationary effect of 200 percent increment on the central economic item of a country?”

Asefon urged the government to rescind the plan till adequate arrangements like refining at home and utilising the nation’s petrochemical by-products are made.

”After that, there will be a robust discussion by all stakeholders to deal with associated socioeconomic issues and discuss the details of the new regime. It is only on this condition that there can be a corresponding social equilibrium, economic prosperity, job and wealth creation for Nigerians.”

Finance, Budget and National Planning Minister , Zainab Ahmed, had announced that the government would remove fuel subsidy and replace it with a monthly N5,000 transport grant to about 40 million poor Nigerians.