₦airaland Forum

The Federal Government may deduct at least N2.4tn from the Federation Account to fund the N5, 000 cash palliative that will be handed over to 40 million poor Nigerians after the fuel subsidy has been removed next year.

This is just as The PUNCH learnt on Thursday that the list of poor Nigerians on the Federal Government’s National Social Register had surpassed 42 million and may hit 43 million by December. This implies that the figure to be spent on the subsidy palliative may hit N2.58tn in one year.

 When contacted on the telephone on Thursday on how funds for the N5,000 palliative would be sourced, Yunusa Abdullahi, the Media Adviser to the Minister of Finance, Budget and National Planning, Zainab Ahmed, referred The PUNCH to a statement by his principal after the Federal Executive Council meeting on Wednesday.

In the statement, Ahmed noted that the funding would come from FAAC allocations. FAAC which is headed by the Minister of Finance, comprises Commissioners of Finance from the 36 states, representatives of revenue-generating agencies such as the Nigerian National Petroleum Company Limited, Federal Inland Revenue Service, Department of Petroleum Resources, Central Bank of Nigeria, Nigeria Customs Service among others.

These revenue-generating agencies are expected to remit a specified amount of their revenue to the Federation Account which will be distributed among the three tiers of government.

FG to negotiate with FAAC members before deduction

Ahmed, however, noted that negotiation was still ongoing.

“So these are things that we are still in negotiation because it’s still money that would have to come from the Federation Account. So everybody that is a member of FAAC will have to agree on the numbers.”

The Group Managing Director of the Nigerian National Petroleum Company Limited, Mele Kyari, had on Tuesday announced at a World Bank event in Abuja that the  subsidy on petrol was not sustainable.

He said the Federal Government would in 2022 remove petrol subsidy paving the way for the sale of the product for  between N320 and N340 per litre.

Also at the World Bank event, the Minister of Finance, Budget and National Planning said the subsidy was not benefitting the poor.

According to her, to cushion the effect of fuel subsidy removal, the Federal Government will give a transport grant of N5,000 each to between 30 million and 40 million poor Nigerians.

The N5000 transport palliative planned to be disbursed to 40 million Nigerians means the Federal Government will be spending a total of N200bn every month on the initiative. Since the government has said the initiative may last for 12 months, it follows then that the scheme will gulp N2.4tn in one year.

Meanwhile, impeccable sources in the Federal Ministry of Humanitarian Affairs, Disaster Management and Social Development, told The PUNCH that the government had already identified 42 million poor people hence the sharing of the N5, 000 would not be cumbersome.

One of the sources explained that all the 36 states and the Federal Capital Territory sent a list to the ministry every month which is computed into the National Social Register.

The official, who wished to remain anonymous because he was not authorised to speak, said, “The 40 million that the Federal Government is referring to has actually risen to about 42 million. These are the poor people we have identified over the years. Their names were sent to us by the ministries of planning in the various states.

“They send updates to us every month and then we add the names to our social register. As of today, the figure is about 42 million and is expected to hit 43 million by next month.”

When asked how the beneficiaries are paid, the official said there were some remote areas that lacked Internet or financial facilities and so they were handed cash.

“The National Cash Office would identify some vendors that would then hand over the cash to these poor people. We know that there are some people who are so poor that they don’t own phones or have account numbers. We would not deny them of the cash because of their condition. This was how we handed them cash during the COVID-19 lockdown last year,” he said.

When asked if the identities of the beneficiaries would be revealed, the official said the policy of the Federal Government was that the identities of such people would not be revealed. He, however, said the states would be in the best position to answer the question since they were the ones generating the list.

“Our Minister, Sadiya Farouq, said during COVID-19 briefing last year that it would not be good to publish names of beneficiaries because of human rights issues. In any case, how would you even verify the identity of someone that was given money in Maiduguri? Would you travel there?” he asked.

Govt must fix refinery before removing subsidy, PENGASSAN insists

In a related development, the Petroleum and Natural Gas Senior Staff Association of Nigeria on Thursday warned that increasing the cost of petrol without concluding the ongoing negotiations on the matter would create serious problems.It disclosed this in reaction to the statement made on Tuesday by the Group Managing Director of the Nigerian National Petroleum Company Limited, when he announced that petrol would sell for between N320 and N340 per litre from February 2022.

Speaking to one of our correspondents on Thursday on the matter, the General Secretary, PENGASSAN, Lumumba Okugbawa, said the country’s refineries must work before fuel subsidy would be stopped.He stressed that this was what PENGASSAN, through its affiliate, the Trade Union Congress, had been telling the government, adding that any attempt to remove subsidy without concluding these issues being negotiated would cause serious issues.

This came as the NNPC distanced itself from petroleum products’ pricing functions when contacted to speak on whether it had concluded negotiations with labour unions on matters of subsidy removal.

Asked whether the negotiations between the government and labour as regards subsidy removal had been concluded, Okugbawa replied in the negative.

He said, “They are talking with NLC (Nigeria Labour Congress) and TUC and we are affiliated to the unions. NUPENG is affiliated to NLC, while we are affiliated to TUC. We are all collaborating in the discussions to get a better understanding on this.

“So, no; negotiations have not ended. However, it is not a decision yet, rather they (government) are just planning. But definitely it is going to create serious issues if they do it.”

He said the move to hike petrol price to N340/litre was not welcome by oil workers and would be resisted if the government tries to implement it.

“Our position is simple, that it is not a welcome development. Is that the New Year gift they want to give to Nigerians? It will be resisted,” he stated.

On claims that the payment of subsidy had been burdensome on government, Okugbawa said this was why PENGASSAN had been calling on government to fix refineries.

He said, “We’ve said that an import-driven form of deregulation will create this sort of problem that they are talking about, and that what is necessary is local production-driven deregulation.

“We should not be listening to international monetary bodies and others before we take our own decisions. Let’s do what we should do by creating more functional refineries.

“They’ve started a good job by carrying out rehabilitation at the Port Harcourt refinery although the job has not started as such. But we know that we will get there, and then build more modular refineries.”He added, “They should encourage more private people to be involved, because you will have to produce locally to handle this issue. Once you are not producing locally, the price will affect you as it is affecting us now.”

He further noted that when refineries work optimally, the cost of refined petroleum products in Nigeria would reduce and by then the debate for subsidy might cease.

Okugbawa said, “Prices will reduce very well because there are so many things tied to the importation of fuel such as landing cost, marketers margin and many other margins that are computed.

“But all those will be removed when we produce locally. Since a ship is not going to stay at the ports for days discharging products, all those associated landing costs will be reduced.

“So instead of paying all those, demurrage and others, you will cut them off and these are the factors. We know that when the international price of oil goes up, petrol price will also go up.

“But if we are refining locally and the price of crude oil goes up in the international market, it is to our own advantage. Nothing is too much to invest to ensure that we refine locally. We have been saying this since.”

When contacted to tell whether negotiations with labour had been concluded, the spokesperson of NNPC, Garba-Deen Muhammad, stated that the issue of petrol pricing was not the function of the oil firm.

He said, “I wouldn’t know because it is a policy meeting. As you know, since the coming of the PIA (Petroleum Industry Act), the NNPC is an operator and marketer.

“So I really don’t know the status of the discussion. In any case, price issues are policy matters. NNPC does not fix price, it has no mandate. It operates in the sector as a business concern governed by CAMA Laws.”

Meanwhile, the Senior Staff Association of Statutory Corporations and Government-Owned Companies has vowed to resist the removal of subsidy unless the government increases the national minimum wage to reflect the projected hike in fuel pump price estimated to sell at N342 per litre in 2022.

The union stated that it would not have issues with the planned removal of subsidy as advised by the International Monetary Fund, if the Federal Government increased the minimum wage by at least 300 per cent.

The Secretary-General, Senior Staff Association of Statutory Corporations and Government-Owned Companies, Dr Ayo Olorunfemi, said this in a telephone interview with The PUNCH on Wednesday.

Olorunfemi argued that the planned fuel price hike would drive up the cost of goods and services by over 300 per cent, insisting that the government should be ready to increase the minimum wage to N200,000 from the current N30,000.

The SSASCGC scribe said, “If they (FG) must do this (increase the pump price), minimum wage must be increased by 300 per cent. That’s the least we can accept. If we do a thorough calculation, the minimum wage, based on the 2015 salary structure, should be N30,000.

“The increases that have occurred from 2015 to date and that’s the percentage increase that we should be talking about.

“If the prices of goods and services have increased by 400 per cent, then we should be talking about N120,000 minimum wage. And by the time they remove this subsidy, it would further increase by another 300 per cent. So, we should be talking about N200,000 minimum wage.

“If they are ready to do that, they can go ahead with the IMF directive but if they can’t do that, let’s remain the way we are.”

Olorunfemi, who is the Chairman, Trade Union Congress Political Commission, flayed the government for its lack of innovative thinking, adding that the FG’s cluelessness has wrecked the economy and push up inflation to record levels.

FG yet to meet conditions for subsidy removal – Union

The union which has over 20,000 members further submitted that the FG has not put in place the necessary structures or meet the conditions that would make subsidy removal palatable to Nigerians.

According to him, the nation is still grappling with inadequate road and rail infrastructure, inadequate housing, stressing that the IMF advice would further impoverish Nigerians.

He asked, “Where is the rail to Lokoja or Okene? The only one they have done is from Abuja to Kaduna by the last administration. So many conditions will determine whether this thing (fuel subsidy removal) will work or not and I think it is time for this government to realise that they cannot be leading them by the nose to anywhere and they would continue to follow.

Speaking in the same vein, the National President, Association of Senior Civil Servants of Nigeria, Dr Tommy Etim, said the planned subsidy removal was not acceptable to his association.

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Nigerians have cried out to President Muhammadu Buhari over the high cost of Liquefied Petroleum Gas (LPG), otherwise called cooking gas, in the country, urging him to take drastic measures to crash the price of the product in the interest of the masses.

From Lagos to Kano, Kebbi, Bayelsa, Cross River, Port Harcourt and Benue, many households lamented that the cost of the product has risen beyond their reach, urging the President, who doubles as the Minister of Petroleum Resources, to take urgent steps to make it as affordable as it once were if he loves poor Nigerians as he claims.

Recall that earlier this month, marketers of LPG expressed concerns over the supply shortage and persistent increase in the price of cooking gas and cylinders in Nigeria.

The marketers had warned that the 12.5kg cylinder of cooking gas, which then sold at between N7,500 and N8,000 could rise to N10,000 by December if the government fails to address the crisis.

Executive secretary of the National Association of LPG Marketers, Mr. Bassey Essien, who gave the warning, blamed the hike in the price of the product on the recently introduced import charges and Value Added Tax (VAT) by the Federal Government, saying, “the price of cooking gas may as well reach N10,000 for a 12.5kg cylinder.”

In Kebbi State, a National Youth Service Corps (NYSC) member serving in Jega, Francis Oluwayomi, said the product has become a luxury in the area.

“Here, it is 700 per kilogramme (kg) and the marketers are threatening that that the prices would still go up. In the past, I used to fill the gas up, but now, I just go there and tell them to sell N3,000 worth of gas, because I can’t kill myself. A lot of people have retired their cylinders and started using coal to cook but that one is even becoming expensive. I am fed up.”

A resident of Port Harcourt, Seyi Abidoye, said a 12.5kg cylinder retails for between N8,500 and N9, 000, saying the situation was unbearable.

“Rent, food, school fees are all going up everyday. The cost of living is getting out of hand. I bought it at N7, 500 just last month, and it has gone up by N1, 000 in less than a month. The dealers are adding money every other day. This is not sustainable for us. Early this year, this same cylinder was less than N4, 000; today it is more than double the price. Only God knows how much we would buy it towards Christmas when gas is usually scarce here,” he said.

According to Nancy Adenike, who resides in Ipaja area of Lagos State, “two weeks ago, I bought my 12.5kg for N7,200; the same day by evening it had become N7,500.”

Oluseun Olofin, a resident in Ayobo area of the state, said: “It is really sad, which way is the country going? The cost of practically everything you need for survival is on the increase. The country is becoming unbearable for the masses.”

Adebusola Ishola, a resident in Ikotun area of Lagos, also said: “A kilogramme of gas, which used to cost N300, now goes for N700. This is getting unbearable for us. I wonder what would happen as we approach the festive season.

“I just bought gas yesterday at N8, 200 for 12.5kg,” he added.

Investigations by The Guardian in Kano State showed that a sizable number of residents have resorted to using firewood and charcoal as an alternative to cooking gas due to the new price regime.

A resident, Alhaji Kabir Muhammad of Tudun Wada quarters, Kano metropolis, said the hike in the price of the product has taken a heavy toll on his life as an average income earner.

Muhammad said he had been using the product for over a decade now due to its affordability and accessibility but could no longer afford it now.

Another resident, Labaran Habib of Jaen Quarters in Gwale local council area, said it has practically become impossible for him to fill his 12.5kg since the price shot up. He explained that a 12.5kg cylinder sold at N3,500 in the state six months ago as against the current price of N8,000.

Residents of Calabar, the Cross River State capital, also decried the continuous rise in the price of cooking gas, stating that it has never been this bad in the history of Nigeria.

A resident, who identified herself simply as Mrs. Affiong, lamented the constant increase, saying she filled her 7kg cylinder last week for N5,600 at the rate of N800 per kg.

“In the past three months, I have been spending more than usual on filling my cylinder. Every time you go to gas station, they give you a new price. It is frustrating and my gas only last for one month. How do we cope with this in this country?” she asked.

A spinster, Anabel Ojong said: “I can no longer fill my 3kg cylinder since the price of gas increased to N700 per kilogramme and now N850. Most times, I only fill a kilogramme that would last me for one week. And it’s not just gas. The price of foodstuff is increasing on a daily basis; the masses are suffering. I wonder why the government derives pleasure in punishing the citizens.” She lamented.

One Mr. Benedict Ekpenyong claimed that because of the increase in the price of gas, his family cooks once a day.

“I have told my wife to cook just once a day. We no longer warm our food; we eat our lunch and dinner cold. I cannot afford to be filling 12.5 kilogrammes at N800 and sometimes N850 and that will not even last for one month. To tell you the truth, in the past three months, I could only afford to fill four kilogrammes. It has never been this bad,” he lamented.

It was the same tales of lamentation in Benue State, where a woman, Josephine Tsueka, told The Guardian that due to the daily rise in the price of cooking, she has resorted to the use of firewood and charcoal to cook.

But she lamented that even charcoal and firewood were gradually getting out of hand. The situation in Bayelsa State was not different.
A visit to some of the gas refilling plants in Yenagoa revealed that the sale of cooking gas has reduced drastically as customers now patronise those selling kerosene obtained from illegal refining outlets known as ‘kpofire’.

The Guardian checks revealed that a kilogrammme of cooking gas, which was sold at N360 in October last year was sold at ₦720 as at yesterday.

This means that a three-kilogramme gas cylinder which was refilled at between ₦1, 080 to ₦1,180 now goes for between ₦2,700 to ₦3,000, while 12.5kg normally which was refilled at N4,500 now costs between ₦8,500 and ₦9,000.

Residents who spoke with The Guardian said they could no longer afford to buy at that price, so they had to go back to kerosene stove while some of them now use charcoal and firewood.

Also, most food vendors and restaurants that could not use firewood and kerosene because of the peculiarity of their environment have increased the prices of their food.

At a popular eatery in Ekeki area of Yenagoa, a plate of food that was sold at ₦500 now costs ₦700. A housewife, Mrs Tessy Binaowei, said: “I was so happy when my husband brought home the cooking gas three years ago because it saves time and I don’t have to wash the back of my pots every now and then. But it’s has become too bad that I had to go back to where I was coming from.

“I have to wake up as early as 4:00am now to look for other alternatives to see how I can boil water for my kids to take their to bath before going to school. The cold weather here and the incessant blackout are not helping matters. “I am calling on the government to quickly do something because the suffering is becoming unbearable and suffocating.”