President Muhammadu Buhari is currently in a (quandary) dilemma over what to do about the perennial energy crisis manifesting in long fuel queues across the country. The confusion is coming just as the petroleum marketers are expecting the federal government to pay them their outstanding claims in respect of the petroleum products they imported into the country.

Meanwhile, the World Bank has advised the Federal Government to remove the subsidy on fuel in order to save Nigeria the trouble of devoting nearly half of its annual budget to funding the fuel importation scheme. The issue of subsidy removal has taken a centre stage in Nigeria’s economic discourse in the last five years.

It has also assumed the dimension of a political tool and campaign instrument in the hands of politicians. An independent audit conducted by the Nigeria Extractive Industry Transparency Initiative ( NEITI) showed that over N4 trillion was paid to petroleum product marketers as subsidy from 2006-2012. The breakdown of the payments showed that N2.197billion was paid as subsidy in 2006, N236.64billion in 2007 and N360.1 billion in 2008.

In 2009 the country paid N198.1billion as subsidy for petroleum products and in 2010 the subsidy payment rose to N416.45billion. It further skyrocketed to N1.9 trillion in 2011 and later declined to N690 billion in 2012 following the subsidy protests across the country in January of that year. Mass protests tagged ‘Occupy Naija’, followed the scrapping of the fuel subsidy scheme by the then President, Dr. Goodluck Jonathan on January 1, 2012.

Jonathan had at that time taken the decision based on the premise that it made economic sense to do away with fuel subsidy but the Nigeria Labour Congress ( NLC), civil society organisations as well as Action Congress of Nigeria (ACN), the main opposition political party at that time, mobilised against it, forcing the Federal Government to partially back down.

Sunday Telegraph learnt that President Buhari and his party having reviewed the state of the economy, have become convinced that the subsidy on fuel was certainly not sustainable in an economy plagued by dwindling revenue occasioned by the continuos slide in the price of crude oil at the international market. They are, however, handicapped by the difficulty in switching from the prosubsidy position they earlier held as at 2012 to becoming apostles of fuel subsidy removal in the current dispensation.

However, the Acting Executive Secretary of NEITI, Dr. Orji Ogbonnaya Orji has said the possible policy shift by the Federal Government towards removal of fuel subsidy is a welcome development and a step in the right direction. Orji said that the proposal to remove fuel subsidy was consistent with NEITI’s recommendations to the Federal Government based on its study of the petroleum sector over the last six years.

Addressing a Policy Roundtable on Subsidy Removal Debate organised by the Shehu Musa Yar’Adua Centre in Abuja, Orji argued that Nigeria’s current challenges with the crash in the global oil price makes it more difficult to sustain the subsidy scheme, which appears to fund the lifestyle of the rich, while majority of the citizens wallow in poverty.
According to him, the removal of the subsidy will free over N700 billion annually, which can be channeled to provision of roads, education, health service, power, security, creation of jobs and basic benefits for the poor in the society.

He explained that oil subsidy was originally conceived as a financial assistance by the Federal Government to Nigerians to enable them buy refined products at much lower price than the prevailing market price as well as a temporary measure to ensure products availability all year round.
“In removing the subsidy, it is the position of NEITI that the government considers progressive measures to put the welfare of the ordinary citizen at the centre of the implementation, by creation of palliative programmes to reduce the pain temporarily that may be experienced by the poor and vulnerable in the short term.

Also speaking on the contentious issue, Prof. John Adeoti of the Nigeria Institute of Social and Economic Research (NISER) advised the government to implement the removal of the fuel subsidy side by side the safety net programmes that could grant relief to the poor. In the words of Dr. Dauda Garuba of Natural Resource Governance Institute (NGRI), the time for this bold decision has finally come provided that the government sustains the on-going war against corruption to block the leakages.

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has also endorsed the move to scrap the controversial fuel subsidy. President of IPMAN, Elder Chinedu Okoronkwo said the subsidy should be removed since it has never helped and would never help the oil sector. He posited that everybody denies not enjoying fuel subsidy and queried why it should be retained. “Subsidy has never helped us. Off course l am talking as an Independent Marketer who does not claim subsidy.

The subsidy is for the masses but the masses are saying that they don’t enjoy the subsidy and why must we kill ourselves with it? IPMAN does not enjoy subsidy and it is stated clearly, therefore it should be removed. “Independent Marketers. We don’t claim subsidy.

The template does not give us anything. Our profit margin is there.” In a related development, National Chairman of APC, Chief John Odigie- Oyegun was cautious in his comments on the issue. He would neither endorse nor condemn the panned removal of fuel subsidy when Sunday Telegraph met him. But if Oyegun was being diplomatic, a former Governor of Lagos State and National Leader of the APC, Asiwaju Bola Tinubu on Friday bluntly asked the Federal Government to remove the subsidy of petroleum products.

Tinubu said: “It is better that we remove it, not for the austere purpose of saving money but to use the money more wisely that we might better save the people. Let us begin a process of a thoughtful, but decisive subsidy phase-out.”

In the last couple of weeks, the Federal Government had sent conflicting signals about its intentions towards the subsidy scheme. Group Managing Director, Nigeria National Petroleum Corporation (NNPC), Dr Ibe Kachikwu, had on one occasion, dropped a hint that the subsidy scheme would be abolished and the pump price of fuel adjusted upwards.

However, Kachikwu had since recanted when he saw the angry reactions of the Nigeria Labour Congress (NLC) which threatened to embark on street protests again should the government dared remove fuel subsidy. Speaking at a media briefing in Abuja on Thursday, Kachikwu, who also doubles as the Minister of State (Petroleum), insisted that there were no plans to increase the pump price back to N97, which it was before the run up to the last general elections, and also denied plans to remove subsidy.

Special Adviser to the President on National Assembly Matters, Senator Ita Enang told reporters on Friday that though the appropriate government agencies had spoken on the issue, the picture will get clearer when President Muhamnadu Buhari presents the 2016 Appropriation Bill on Tuesday.

lalasticlala

Sunday Telegraph learnt that President Buhari and his party having reviewed the state of the economy, have become convinced that the subsidy on fuel was certainly not sustainable in an economy plagued by dwindling revenue occasioned by the continuos slide in the price of crude oil at the international market. They are, however, handicapped by the difficulty in switching from the prosubsidy position they earlier held as at 2012 to becoming apostles of fuel subsidy removal in the current dispensation.

Like seriously?

Bubu and his change agent will never cease to amaze someborri

I thought they said bubu was intelligent, action man, man of integrity, messiah of the World not only Nigeria and all in all?

Ma laugh small

Keneking:
I don't see any dilemma with the issue.

Pretty straight forward'

- sack subsidy
- delete subsidy from the budget
- sack employees working on the subsidy payment analysis in NNPC
- block any protest by any groups with armed forces
- any PDP member that has objection should be dealt with accordingly

MzPecs:

Like seriously?

Bubu and his change agent will never cease to amaze someborri

I thought bubu was intelligent, action man, man of integrity, messiah of the World not only Nigeria and all in all?

Ma laugh small

SeverusSnape:



www.nairaland.com/attachments/3206894_tmp30566fbimg1450529509545914443311_jpeg4c3407a2efe4a93f64218f856abf9b9a

The man is a dull'ard. Who ever believed he was intelligent is a bigger dull'ard.

And they still go about portraying the bigger dull'ard they are on NL

Keneking:
I don't see any dilemma with the issue.

Pretty straight forward'

- sack subsidy
- delete subsidy from the budget
- sack employees working on the subsidy payment analysis in NNPC
- block any protest by any groups with armed forces
- any PDP member that has objection should be dealt with accordingly

Tinubu, APC back subsidy removal cautiously

Demmocrats:


When a party leader with no background knowledge, not even minister of finance or advance degree in economics is advising the government on how to run the economy that's why we are in shit hole right now.

tobimillar:
Remove subsidy and sell fuel for 55 naira / litre

Also speaking on the contentious issue, Prof. John Adeoti of the Nigeria Institute of Social and Economic Research (NISER) advised the government to implement the removal of the fuel subsidy side by side the safety net programmes that could grant relief to the poor. In the words of Dr. Dauda Garuba of Natural Resource Governance Institute (NGRI), the time for this bold decision has finally come provided that the government sustains the on-going war against corruption to block the leakages.

Yungwizzzy:


he governed the most economic vibrant state for 8 years wailer

Yungwizzzy:


he governed the most economic vibrant state for 8 years wailer

and what did he have to show for it?
Zilch, Zippo and Nada.

Save for Fashola, Lagos'd still be a huge mess and an Agbero haven.

Say something else please

MizMyColi:




This man has spoken well.
However, I'd like to add that there is no on-going war against corruption.

What we see daily are media trials of perceived political enemies.

The past administration engaged in some sleaze and corrupt practices, but they are gone now, and gone for good.

However, no one seems to be beaming a search light on the current administration, which might as well be perpetuating the same act we stoned the past admin for...using more sophisticated and water-tight schemes this time.

The feelers here is that as long as you're in the right camp, say and do the "right" things, you will not be hounded by the EFCC, otherwise, you're on your own.

This in itself is not a wholesome development.

themilanway:


You are free to believe what ever you like dear.Its a free world

MizMyColi:


I am always aware of that.
You needn't remind me dear.

MizMyColi:


and what did he have to show for it?
Zilch, Zippo and Nada.

Save for Fashola, Lagos'd still be a huge mess and an Agbero haven.

Say something else please

themilanway:


On the contrary,was only encouraging you to continue in your believe

themilanway:


Show us one governor that had that little or no hep from the federal government

Keneking:
I don't see any dilemma with the issue.

Pretty straight forward'

- sack subsidy
- delete subsidy from the budget
- sack employees working on the subsidy payment analysis in NNPC
- block any protest by any groups with armed forces
- any PDP member that has objection should be dealt with accordingly