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Motorists, Commuters Kick As Senate Proposes N5 Petrol Charge

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BY SOLOMON AYADO, AHURAKA ISAH, Abuja, CHIMA AKWAJA and OLUSHOLA BELLO,

Motorists and commuters yesterday kicked against the proposal by the Senate to effect a N5 levy, chargeable per litre, on every petrol and diesel products imported into the country and on other non-locally refined petroleum products.

The Red Chamber said the N5 charges will be a source of revenue generation for funding and maintenance of roads in the country.

But road users, including motorists, commuters and motorcyclists in the country described the plan to effect the N5 levy on petrol and diesel an unhealthy development, which if implemented, would cause untold hardship to them.

This, they argued, is coming at a time the country is still enmeshed in recession, even as the government is yet to come up with any concrete plan for economic stability.

Those who spoke to LEADERSHIP Friday on the proposed legislation said the development automatically translates to the fact that there will be more trouble for Nigerians as their suffering will heighten.

The implication of the bill, which was listed on the Senate Order Paper yesterday, is that end users who are motorists will pay N5 tax on every litre of fuel or diesel bought at any petrol station.

The bill titled, ‘National Roads Fund’ was to be presented by the Senate committee chairman on Works, Senator Kabiru Gaya, but was stepped down at the last minute.

The National Roads Fund, (EST.ETC) Bill 2017 (S.B218), makes it mandatory that fuel levy of N5 is chargeable per liter on any volume of petrol and diesel products imported into the country and on locally refined products.

If it sails through to become law, the bill will evolve into additional source of revenue for the National Roads Funds, just as it will also provide a predictable and sustainable funding for road management network.

The Senate noted that “inappropriate funding for the management of road infrastructure leads to premature failure of assets and results in increased construction costs for routine and periodic maintenance”.

If the proposed plan by the Senate unfolds into a reality, a litre of petrol which currently sells at N145 may be scaled up to between N150 and N155 per litre.

The bill signed by 12 out of the 15 members of the Senate committee on works chaired by Senator Gaya (APC Kano South) recommends a road fund solution to mitigate some of the insufficiency and unpredictability of funding in the maintenance of roads.

The Senate also plans other sources of generating revenue for roads maintenance, including Axle load control charges, International Vehicle Transit Charges, Roads Fund Surcharge of 0.5% chargeable on the assessed value of any vehicle imported at any time into Nigeria, 10% from toll fees on federal roads and 10% of revenue accruing from lease or license or other fees pertaining to non –vehicular road usages along any federal road collected by federal roads agency.

The Senate committee chairman on Works, Senator Gaya had in October last year made a lead debate on the bill and submitted that Roads Fund Solution is the way out for the rehabilitation and maintenance of national roads in Nigeria.

But in a swift reaction to the proposal by the upper chamber of the federal legislature, the Amalgamated Commercial Motorcycle and Tricycle Owners, Repairs and Riders Association of Nigeria (ACOMORAN) last night described the plan to effect the N5 charges on petrol and diesel as unhealthy, saying if implemented it would cause untold hardship to motorists.

In a telephone chat with LEADERSHIP, national president of ACOMORAN, Babangida Maihula, contended that the proposal will definitely be unrealistic because it was coming in the face of the economic recession the country is still grappling with.

Besides, he said it is a complicated scenario when it is considered that the federal was still struggling to put in place viable economic measures that can stabilise the economic hardship dogging Nigerians in the face.

He said already, motorists are merely trying to survive the hardship and that any further increase in the price of petrol would deteriorate the economic situation in the country.

According to him, while the masses are faced with varied challenges, especially the instability to meet the cost of living, the proposal, if effected, will not be a good development to enhance the welfare of Nigerians.

Maihula said, “If there is any plan to increase charges on petrol, that will be unhealthy. We members of the masses, especially motorists are struggling to survive and any further increase will add to the already deteriorating economic situation. The motorists are feeling the hardship and we are not comfortable with the development”.

An economist, Mr. Tunde Oyediran, argued that, while the road funds is a welcome development, the fuel levy of N5 chargeable per litre on any volume of petroleum and diesel products imported into Nigeria and on locally refined Petroleum products may lead to an increase in fuel prices.

He added that Nigerian was not ready for such legislation at a time consumer products are on the high side in the market. A

ccording to Oyediran, the rise in price fuel will lead to tripple effect on the other part of the economy, even as he said that government should continue on fiscal policy, taxation and borrowing, but should also ensure that the funds are put on developmental projects

Vice chairman, Winigroup, an information technology security company, Mr. Tim Akano, said if the Senate passes the bill, it will definitely lead to increase in the pump price of petrol product, which is not what Nigerians need at this time.

He said, “What Nigeria needs right now is effective tax collection. If they want to generate more money, they need to generate more of the taxes that are on ground. If government can focus on stabilising electricity, there are millions of businesses that will spring up, thus bringing new businesses into the tax net”.

On his part, the executive secretary, Association of Licenced Telecommunications Operators of Nigeria (ALTON), Mr. Gbolahan Awonuga, warned that another increase in pump price through the imposition of N5 charge on fuel and diesel will amount to political suicide.

“If they should do that the cost of transport will increase. The cost of food prices will go up and even the cost of recharge cards will go up as telecommunications operators will be affected by the additional cost of diesel used in running the base stations. Who will cater for the N5; is it not the telecommunications subscribers?” He queried.

On his part, the director-general of Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf , agreed with the Senate that the country cannot continue to fund maintenance of its roads from the budget.

“All over the world there is always this kind of funds that is created specifically for the funding of the roads”, he stated, noting that, while  the state of Nigeria roads are very deplorable at the moment, it is a major infrastructure that the country needs in support the economy.

Muda added that one of the best way to deal with the issue of the road is to create the road funds, saying the road fund is a good idea.

He, however, said that how the funds will be generated is something the country would have to deliberate well on, depending on the prevailing social economic condition.

He added that, with a lot of challenges and difficulties facing the citizens, the government needs to choose the right time, even though the concept is desirable.

 




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2 Comments

  1. Vita

    June 2, 2017 at 5:08 am

    A surcharge of N5 per litre of petrol/diesel is definitely a wrong policy focus. There are millions of Nigerians that don’t own cars but fuel their generators, grinding machines, welding machines etc. If this group is charged N5/liter which is meant to provide fund for road maintenance, it will be unfair to them. Instead payment of road tax by motorists should be implemented. Every motorist should be mandated to pay road tax renewable every year. This will help to ensure that only the target group pay the tax instead of blanket taxation. Secondly, the timing is also wrong. Everyone is groaning due to the current excessive economic hardship. Palliative policies should rather be considered instead of policies that will add more burden to the already overstretched citizens.

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