Following the ruckus over fuel subsidy removal and retention, Nigerian governors and the country’s labour union have decided to launch an enquiry into the amount of premium motor spirit (PMS) consumed in the country, with both unconvinced by the figures given out by the Nigerian National Petroleum Corporation (NNPC).
LEADERSHIP reports that sequel to its meeting of the 19th of January, the Nigerian Governors Forum (NGF) yesterday met with the leadership of the Nigeria Labour Congress (NLC), led by its president, Comrade Ayuba Waba, to deliberate on the fuel subsidy removal, which both groups believe is a necessary action that the country must deal with now or in the nearest future.
According to a statement by NGF spokesman, Abdulrazaque Bello-Barkindo, the meeting which was held at the NGF secretariat in Maitama, Abuja, brokered a partnership between the NGF and the NLC, as both parties agreed that the lacuna in the subsidy removal agenda was hidden in the untruths bandied by administrators of the subsidy, particularly the NNPC, which both groups identify to be at the forefront of the mismanagement of the proceeds accrued therein.
Delivering his opening remarks at the meeting also attended by the Trade Union Congress (TUC) president and a host of other leaders of organised labour in the country, the chairman of the NGF and Ekiti State Governor Kayode Fayemi, argued that the nation’s economy is at the precipice and it had become necessary for the two groups to carefully verify all of NNPC’s estimates to ensure that whatever action is taken on subsidy, it would be the people that get direct benefits and not a few wealthy individuals and their cronies.
Dr Fayemi told the Labour leadership that subsidy removal has remained an on-gong conversation not just among governors but the country in general even as he emphasised that governors cannot but be part of the solution providers in this onerous task facing the nation.
Fayemi said: “There are raging questions of accountability associated with subsidy removal in the country. The NGF and the NLC can jointly work together to proffer solutions that heal the economy and provide succour to the Nigerian people.”
The NGF chairman, who led a delegation comprising chairman of Northern Governors’ Forum/Plateau State Governor Simon Bako Lalong, and Governor Godwin Obaseki of Edo State, to the meeting, stressed that governors cannot ignore the economics of petroleum, arguing that all the countries surrounding Nigeria, including Niger, Mali, Cameroon and Ghana, have their fuel pump price at the equivalent of one US dollar ($1), as opposed to Nigeria whose pump price is far less than a dollar.
He asserted that the Forum was uncomfortable with the removal of subsidy until it frontally challenges the consumption figures coming from the NNPC.
“We need a partnership with the NLC to confront the challenges of what the NNPC is about, because there is a lot of fraud in the consumption and distribution figures that the country is getting, and we can only move forward if the NLC engages all those who are knowledgeable in the field like PENGASSAN to conduct a thorough research into the sector before any further action is taken on subsidy,” Dr Fayemi declared.
On the part of the states, Fayemi stated that only about eight states are benefitting directly from the subsidy while all the others have to contend with the situation on their own.
The NGF chairman also insisted that the partnership with the NLC must confront the perennial issue of palliatives for the common man towards cushioning the effects of subsidy removal on the citizenry, as he stated that “not tackling the problem now is tantamount to postponing the evil day.”
“Finding succour for the ordinary Nigerian at this time is absolutely imperative and necessary now more than ever,” he said.
According to him, one of the planks which formed the terms of convening the meeting was to also plead with Labour to jettison its decision to embark on what they referred to as a mega-strike, but to join hands with governors to consider the dimensions at play on the subsidy removal palaver because governors, through their internal mechanisms, had already found out that what is paid is egregiously higher than what is actually being declared by the country’s petroleum industry managers.
On his part, the governor of Edo State, Godwin Obaseki, warned that the country had a choice of ‘continuing to behave like Father Christmas (Santa Claus) or take concrete actions on a problem that is permanently with us rather than throwing away N3trillion on subsidy’.
Governor Obaseki suggested that the nation can, in the interim, increase productivity to reduce imports and create jobs.
He also emphasised that the country would do well to revamp the power sector, which is virtually comatose “because without power, we will continue to throw millions of our people into unemployment, and ultimately, poverty,” even as he reminded all present that they must realise they had a country to manage.
The governor of Plateau State Simon Lalong, who like Governor Obaseki joined the meeting virtually, recalled that the NGF had spent three years on this matter and insisted that the government cannot continue with subsidising petroleum products.
He said, “We must find options and create opportunities that address the hardships that stare our people in the face.”
Lalong volunteered that the painstaking work that led to the solutions that the NGF was highlighting took a year to come up with and urged the teams from the two groups to immediately set to work to find the way forward.
This meeting took place barely an hour before the NLC announced the suspension of its mega strike, with the NLC telling the governors that its committee had consulted widely and decided to call it off before arriving at the NGF secretariat.
Both Comrade Ayuba Waba and the TUC president pointed out the trust deficit that characterised previous negotiations and wondered why the subsidy issue had always been shrouded in lack of transparency on the part of the government.
The unionists argued that the conflicting figures that always came from the managers of the petroleum sector always tended towards inefficiency which had remained, to the people and to Labour, completely objectionable.
Meanwhile, the House of Representatives has set up two separate ad hoc committees to ascertain the actual cost of subsidy on petrol on daily basis and the other to ascertain the current state Nigeria’s refineries and how to make them functional.
Speaker Femi Gbajabiamila, while announcing the committees on Wednesday, said there were key questions that needed to be answered before the parliament could take a position.
He announced Hon Abdulkadir Ningi as the chairman of the 14-member panel to determine the volume of daily consumption of PMS, charging the team not to merely rely on figures provided by the NNPC, as it was an interested party.
“Talk to experts, transport unions, the organised labour, and go beyond the figures of the NNPC – deal with facts,” he urged the committee, saying its report was expected within four weeks.
Also announcing membership of the second ad hoc committee, a 15-member panel under chairmanship of Engineer Ganiyu Johnson, the Speaker told the team to, among other things, “determine the state of repair or disrepair of our refineries, and what is needed to bring them to life again.”
According to the Speaker, the debate had been over different figures being bandied about on the actual volume of daily consumption of petrol in Nigeria, as well as the real state of the refineries at the moment.
“These questions need to be determined”, he said, noting that doing so will form the basis for the next move.
FG Has Wasted $10bn On Refineries’ Rehabilitation – Labour
The Nigeria Labour Congress (NLC) has accused the federal government of frittering away $10 billion on the renovation of the country’s four refineries without any tangible result.
It said the lasting solution to the crisis associated with petrol subsidy could only be resolved through the construction of new refineries in the country.
The NLC president, Comrade Ayuba Wabba, stated this in Akure, the Ondo state capital, while speaking on the suspension of the planned nationwide rally against the proposed increase in pump price.
Represented by the national general secretary, Radio, Television and Theatre Arts Workers Union (RATTAWU), Comrade Akpausoh Akpausoh, who coordinated the suspended protest, Wabba said several attempts to resuscitate the existing refineries had failed with over $10 billion going down the drain.
On the suspended protest on fuel subsidy removal, Wabba used the opportunity to demobilise the labour movement in Ondo state.
He, therefore, declared that the only way out of the fuel subsidy crisis was for the federal government to establish another set of refineries so that the importation of finished products of crude oil would come to an end.
Comrade Wabba noted that the federal government’s attempt to hike fuel pump price was illegal because it ran foul of the November 20, 2020 agreement reached by the federal government and the labour union on fuel subsidy.
He said a technical committee was constituted to meet and deliberate on the matter and that it was agreed that no action should be taken on fuel subsidy removal without the input of the labour in the decision-making.
The NLC president, therefore, advised the federal government to inject the proposed fund (N5000) it planned to pay the underprivileged citizenry monthly into the construction of new refineries.
In a remark, the Ondo State NLC chairman, Comrade Sunday Adeleye, who was represented by his vice chairman, Comrade Victor Amoko, said there was no way the oil industry crisis would not persist if the refineries in the country remain moribund.
While lamenting the economic crunch facing Nigerians, the Ondo State Chairman of the Joint Negotiating Council (JNC), Comrade Oluwaniyi Fabunmi, appealed to the federal government to set a timeline for revamping old refineries and constructing new ones.
FG Projects N3trn Budget For 2022 Subsidy Bill
Meanwhile, the federal government is proposing a N3 trillion budget to meet the funding provisions of the incremental fuel subsidy request in the 2022 Budget.
The minister of Finance, Budget, and National Planning, Zainab Ahmed, disclosed this yesterday after the federal executive council meeting presided over by President Muhammadu Buhari at the Presidential Villa, Abuja.
According to her, only N443 billion was provided in the 2022 budget meant to accommodate subsidy from January to June, but taking the prevailing economic realities, both locally and globally, into consideration, Council had proposed a year-long provision for the subsidy.
She said the request was considered by the Council, which directed the ministry to approach the National Assembly for an amendment to the fiscal framework as well as the budget.
She said, “We also presented to Council today a request for Council’s consideration to make additional funding provisions to enable us to meet incremental fuel subsidy requests in the 2022 Budget. You’ll recall that in the 2022 Budget, as appropriated, we have made a provision of N443 billion for a subsidy for January to June.
“Having taken into account the current realities; increased hardship in the population, heighAtened inflation, and also that the measures that needed to be taken to enable a smoother exit from the fuel subsidy are not yet in place, it was agreed by Council that it is desirable to exit fuel subsidy.
“The Nigerian National Petroleum Company (NNPC) has presented to the ministry a request for N3 trillion as fuel subsidy for 2022. What this means is that we have to make an incremental provision of N2.557 trillion to be able to meet the subsidy requirement, which is averaging about N270 billion per month.
“In 2021, the actual under-recovery that has been charged to the federation was N1.2 trillion, which means an average of N100 billion, but in 2022, because of the increased crude oil price per barrel in the global market, now at $80 per barrel, and also because an NNPC assesses that the country is consuming 65.7 million litres per day, now we’ll end up with the incremental cost of N3 trillion in 2022.
“So, this has been considered by Council and we’ve also been asked to approach the National Assembly for an amendment to the fiscal framework as well as the Budget, and to also further discuss with NNPC on how to make provisions for this and also how to rationalise this expenditure”, she said.
On the vagueness of the amount of petroleum products consumed in the country and how the planned N3 trillion subsidy budget would be funded, the minister said more work would be done on the proposal.
“In the case of the budget, we’re looking at extending to December in the first instance, because this budget year is January to December, and we’re going to engage NNPC to further interrogate the request that they presented with a view of trying to see how we can scale it down so that the country is not incurring N3 trillion for fuel subsidy.”
“We agreed with the view of governors, that there is a need to scale down on the size. So even as the government is not immediately removing the fuel subsidy, we have to make sure that what the nation is incurring is efficient, and that it is a real cost that has been consumed by the country.”
“How do we fund it? So, we’ll have to reduce it from that N3 trillion and that is one. Secondly, we have been running reconciliations with NNPC to reduce the cost.
“So, we want to be able to settle some of the subsidy costs through this reconciliation process. So, when we’re done with that, whatever is left that we’re not able to apply to what an NNPC is owing the federation will not be increasing the deficit. And that means increased domestic borrowing. But we haven’t finished reconciliation. This is just the second day that this happened”, she explained.
CNG Hails FG’s Suspension Of Fuel Subsidy
In a related development, the Coalition of Northern Groups (CNG) has commended the suspension of the purported removal of fuel subsidy by the federal government in the 2022 fiscal year.
The group also commended the Senate president, Senator Ahmad Lawan for his intervention along with other lawmakers for ensuring that the interest of the Nigerian people prevail.
In a statement issued yesterday, signed by Samaila Musa, director, strategic communications, CGN advised the federal government to never contemplate removal of subsidy again as it is the only direct benefit that many poor Nigerians enjoy from the government.
CNG, however, urged the government to block all the leakages through which selfish politicians and civil servants corner public resources for their personal aggrandizement.
“The government should also rehabilitate and revamp our four comatose national refineries that were jettisoned. The four refineries have a maximum capacity of refining 450, 000 barrels per day,” it added.
