Nigeria: Fuel Subsidy Removal Certain – Sambo, Governors

President Goodluck Jonathan’s push for the removal of oil subsidy got a major backing yesterday.

The National Economic Council (NEC), at its meeting in Abuja, approved the proposal, which it said is inevitable.

The NEC comprises the Vice President, who chairs it, governors and the Central Bank of Nigeria (CBN) governor.

Its statutory responsibility is listed in the third schedule (Part III) of the constitution, which states:

“The National Economic Council (NEC) shall have power to advise the President concerning the economic affairs of the Federation and in particular on measures necessary for the co-ordination of the economic planning efforts or economic programmes of the various governments of the federation.”

After a six-hour meeting, NEC said if Nigeria must avoid a collapse of its economy, as experienced in Greece, fuel subsidy must go.

It said the consequence of the removal would be little, compared to keeping the subsidy.

Though NEC agreed that subsidy removal would cause some pain, it said it will be temporary.

Speaking to reporters after yesterday’s meeting, Anambra State Governor Peter Obi said NEC supported subsidy removal because “it is a case of inevitability, considering the level of present debt portfolio of the Federal Government, and the continuous financing of it”.

With Obi at the briefing were Ondo State Governor Olusegun Mimiko, Minister of Power Barth Nnaji and National Planning counterpart Shamusideen Usman.

Obi warned of the “grave” consequence of not removing the subsidy.

He said: “Like the President said, either way, there will be grave consequences and one is less, if we take it. There is no place such decision has been taken that people do not feel a temporary pain.

“Everybody will work together to see that this is achievable, but there is a safety net, which has been outlined.”

On the public outcry against subsidy removal, Obi said: “What is happening is a case of Nigerians not trusting the government and it is a case of making a mistake because you can’t use the process of yesterday.

“Those who think of yesterday and today will miss tomorrow. Because people think there was so much waste yesterday, how are we sure that if this one happens it will be utilised properly?

“But there is a firm promise. It is documented and it is for all of us to hold on to it. If we do it, yes, there might be temporary problems but the gains far outweigh the consequences, if we don’t do it.

“Like it is happening today in Europe, Greece would have taken a decision years back and so any other country, but now they are where they are and everybody is now facing a harder situation than if they had taken a decision years back.

“We have all taken a collective decision to support the proposed removal of subsidy on the downstream sector by Mr. President next year.

“In respect of this, the Federal Government has produced a comprehensive document which spells out clearly how the reinvestment funds from next year’s deregulation will be channelled towards creating social safety nets and critical infrastructural projects to help the poor cushion the effect.

“The focus will be on reducing infant and maternal mortality by funding public work programmes/youth unemployment and urban mass transport scheme, which is being worked out with the Labour Congress. Building high profile infrastructural projects as roads and rails, water resources, power and refinery (with the private sector).”

Obi went on: “States and local governments are to prepare their own programmes in order to enhance the effectiveness of the project for the benefits of Nigerians.”

Obi said the other tiers of government “will be collaborating with the Federal Government, in line with the framework for the implementation of the programme. A board of reputable professionals from various sectors will be established for effective management of the freed funds for the benefit of the people.

“The board which will function independent of government control, will ensure transparency and proper application of the funds. States will embark on necessary actions in areas of advocacy to sensitise Nigerians on the expected benefits from deregulation,” he said.

The governor also listed free entry and exit for investors, promotion of competition and ensuring adequate supply of products as some the key benefits of the subsidy removal.

On security, the Anambra State governor said NEC was briefed by the National Security Adviser (NSA) “on the security challenges in the country and sought the co-operation of governors in working closely with the federal authorities in order to meet the security challenges and ensure the security of lives and property of every Nigerian”.

On power, he said: “Nigerian Electricity Regulatory Commission (NERC) has been directed to issue operational licences to states that intend to either generate or distribute power, provided they meet the required conditions.”

Obi described this as part of the ongoing reform in the power sector.

He said NEC constituted a committee, led by Cross River State Governor Liyel Imoke, on the matter. Other members of the committee are Mimiko, Benue State Governor Gabriel Suswam and Governors Patrick Yakowa (Kaduna) and Kashim Shettima (Borno) and himself.

States have also been assigned roles in power distribution and generation. States will now be allowed to own some equity in the distribution company.

Obi said: “The Federal Government’s policy is to encourage states to participate in the power reforms in order to enhance power supply in the country.”

He said some categories of customers are to be subsidised. This, he stressed “is for those who can afford it, to pay the appropriate tariff, while the very low users will be subsidised”.

The Nation

  1. Tar Reply

    If goverment is serious in setting out independent body to regulate that affair no doubt the aims will be achived. May Allah give them courage of doin that. Ameeen

  2. Yusuf Reply

    I believe dis is another tactical way of increasing the pump price of fuel. We should renovate our refinaries b4 removing fuel subsidy. This policy is like those of our past govt” Old wine in new bottle”.

  3. Ayokunle Adeyinka Reply

    Personally,I think the idea is good if properly executed. The chain of responsibly put so much worry in my mind because if the presidency has a right approach about the whole execution process, what about the governors,what about the local governments,I just hope we do the right thing. Secondly,I think there should be proper provision as to how to regular prices of goods and services in other to prevent exploitation. Please the masses on the street should be properly considered.

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