Despite the public outcry against the planned removal of fuel subsidy, President Goodluck Jonathan yesterday insisted on its withdrawal.
Funds saved from the removal will stimulate private sector investments to bridge infrastructure gap and create incentives for investment in refineries and the petroleum industry, the President said.
He spoke at the opening of a Presidential Retreat with the Private Sector on Economic Development and Job Creation at the State House Banquet Hall, Abuja.
Explaining that the plan to remove petroleum subsidy was still at the proposal stage, the President said if it scaled through, the resources hitherto used as subsidy on the importation of petroleum products, would be invested in tangible infrastructure and provision of social safety nets to cushion the impact of the reforms.
According to him, discontinuing with the subsidy remained the only responsible way of harnessing revenue for capital stock formation, among others.
Jonathan said: “ There are proposals to phase out petroleum subsidies in a deliberate and responsible way that will harness revenues for capital stock formation and leverage on private sector investments in public-private partnerships (PPPs).”
His administration, he said, was also working with the National Assembly to pass the Petroleum Industry Bill (PIB) into law, adding that the government was intensifying its engagement with the lawmakers and other key stakeholders to agree on critical reforms to the fiscal regime for the oil and gas sector.
The latest move to withdraw the subsidy has attracted widespread condemnation from several quarters, especially the organised labour.
Those opposed to the proposal argued that the policy would push up the prices of goods and make life unbearable for Nigerians.
Specifically, the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC) cautioned government against the withdrawal, threatening to call its members out to resist the policy.
On Wednesday, Senators mandated its committees to unmask the beneficiaries of the N1.2 trillion subsidy.
Senate President David Mark lamented that the subsidy was not reaching its targeted beneficiaries – the ordinary Nigerians.
Unveiling plans to overhaul the external trade and tariff policies, Jonathan said it was important to promote domestic industries by protecting them from unfair trade practices.
[b]The country, he said, must also adopt a more responsive tariff policy which recognises the limitations of an over-extensive prohibition list.
To ensure responsible fiscal policies, Jonathan said the Federal Government would strive to keep fiscal deficit below three per cent of the Gross Domestic Product (GDP).
There will be a deliberate and systemic reduction of domestic borrowing by government.
Jonathan said the government was accelerating the implementation of key trade, tariff and customs reforms mostly to improve the domestic investment environment to achieve this, eh said.
He said: “Accordingly, in line with the government’s commitment to ensure good and responsible fiscal policies, we are committed to maintaining the fiscal deficit at below three per cent of Gross Domestic Product (GDP) during the life of this administration.
“In this regard, we need to arrive at more effective trade and tariff policies that facilitate the creation of local businesses and jobs.
“We are determined to accelerate the implementation of the 48-hour ports clearance reforms, improve the efficiency of the Nigeria Customs Service and other related agencies, and reduce the incentives for smuggling.”
Speaking of the formidable challenges for achieving these developmental objectives, the President added for achieving some of the fiscal, monetary and other risks that the country must mitigate were becoming more apparent.
Jonathan said: “As evidenced by our strong economic growth in recent times, our nation has been resilient to the global economic downturn. However, we face formidable challenges ahead in charting a course towards the achievement of our developmental objectives outlined in this administration’s economic transformation blueprint.[/b]
Explaining the importance of the retreat, Jonathan said: “Our historical over-reliance on oil revenue has hampered the growth of the non-oil sectors of our economy.
“I am happy to inform you that this administration is committed to reversing this trend by implementing targeted interventions to boost non-oil and real sector productivity.
“For instance, under the Agricultural Transformation Action Plan, efforts are underway to improve the productivity, yield and competiveness of key agricultural commodities with significant export potential.
“By harnessing the value chains in the production of cocoa, groundnut, oil palm and rice, as well as for cotton, cassava and sorghum, we will conserve billions of dollars in foreign exchange that would otherwise have been spent on imports.
‘We will equally reverse the unsustainable food importation process, which has fuelled domestic inflation.
“And in effect, improve our national food security position; and unleash the sector’s potentials for employment generation and wealth creation.”


http://www.thenationonlineng.net/2011/index.php/news/22870-why-petroleum-subsidy-must-go-by-jonathan.html

GEJ, i support the removal as long the money is used for overall development of the country.

Relax101:

GEJ, i support the removal as long the money is used for overall development of the country.

Haha. . . Funny Nigerians

They want to use the over N1trillion for the development of our infrastructure? This is a fantastic idea but wait, there are other questions?

How much of the over N4trillion budget of this year has been used to develop infrastructure? What of last year? Mention the specific infrastructure, and their attendant value for money, please?

Whose responsibility is it to tackle corruption at the borders? This does not only relate to goods being smuggled out but also those being smuggled in.

How come we can't refine our crude, consume locally and also export, thereby earning foreign exchange? Must we continue to import? What's the specific plan to stop importation of petroleum products?

What have successive governments do with savings from gradual removal of fuel subsidy? What palliatives are they talking about apart from a few FGN-assisted buses?

Sincerely, are there no other ways to save money by government? All of us know that this democracy has been expensive.

Tell us, who are the beneficiaries of the subsidy?

And for those that have started extrapolating or directly translating the bandied expected savings to infrastructure, know that the savings won't come until after one year by which prices would have at least doubled or even tripled (as a result of subsidy-removal induced inflation) and the N1trillion would be worth much less. Besides, how much of the N1trillion WILL be 'lost' to corruption?

The social conditions (unemployment, insecurity, crime rate, etc) of our country are already precarious and we would be inflaming the sensitive situation should fuel subsidy be removed without ensuring that refineries work.

Economics does not exist in isolation and even if removal of subsidy makes sense on paper, does it make sense considering our social conditions? Have we put in place the necessary conditions before removing the subsidy? Or we just don't care about what happens to this alread fragile society? Are we asking the right questions and/or solving the right problems? Are we getting our priorities right?

Everywhere you look at in the country, you see different forms of crime that were previously not there. Are we happy with this? Need we complicate an already complex situation? Or are we just ready to give up?

Can government beat its chest and say that it will account for every kobo of the expected savings?

What Mr President should be discussing is not 'why petroleum subsidy must go' but 'why petroleum importation must stop'.

The stoppage of fuel importation is the 'Win/Win' solution for all: the government and the people.

Pukkah:

What Mr President should be discussing is not 'why petroleum subsidy must go' but 'why petroleum importation must stop'.

The stoppage of fuel importation is the 'Win/Win' solution for all: the government and the people.

If you stop petrol importation, then there will be no petrol. What's the point of that? It's an unsmart idea.

GEJ should prepare himself for a protracted battle with Labor next year if he doesn't change his mind.

@Seun, the PLAN should be to stop importation of fuel within a period time by ensuring that refineries work. When refineries work, would we need to import fuel? This is what I think we should be discussing instead of getting used to importation and fixing our gaze on subsidy.

Does it sound smart now?

LOL. . .some Nigerians have to support removal subsidy when virtually all the money budgeted for years are usually stolen with no roads, light, infrastructure, improvement in the economy, etc to show for it. Now, this pin head wants to free up the money spent on subsidy for looting! Haha, it is actually a better plan you know? Most Nigerians are too gullible and stupid to start with so he can sucker you into this mad rhetoric, take the subsidy, gas costs climb beyond the common man, you all suffer and Jonathan and his friends can help themselves to the excess funds! Nigerians are sufferheads. . .FRESH AIR!

it is obvious that pdp does not have enough money to pay their workers hence the idea of removing fuel subsidy.
the only way forward for nigeria is to declare pdp public enemy kill them at sight.
only then will this country move forward.
sometimes when i look at other countries and their govt, i feel ashamed of myself as a nigerian.
before you become the president of a country, you must have told or promised the ppl of the country that if they vote u in, u will do so so and so.
did jonathan promise us that he will extend the tenure to six years? did jonathan tell that he will increase electricity tarrif and decrease supply? did he inform us that the only benefit we get from govt will be removed when he becomes the president? where are his promises?