Finance Minister mum as Lawan counters her claim on fuel subsidy | Dailytrust

Finance Minister mum as Lawan counters her claim on fuel subsidy

The Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, is yet to comment on the position of Senate President Ahmed Lawan that...

The Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, is yet to comment on the position of Senate President Ahmed Lawan that President Muhammadu Buhari did not direct anyone in his administration to implement the removal of petroleum subsidy.

In October, Zainab had announced that the federal government made provision for petrol subsidy only for the first six months of 2022 as the government looked towards complete deregulation of the sector.

She had said: “In our 2022 budget, we only factored in subsidy for the first half of the year; the second half of the year, we are looking at complete deregulation of the sector, saving foreign exchange and potentially earning more from the oil and gas industry”.

But speaking with reporters after meeting with the president at the Presidential Villa, Abuja, on Tuesday, Lawan said he told Buhari about the feelings and concerns of his constituents on critical issues, including the proposed removal of subsidy.

The Senate President said he raised the issue with the president because lawmakers were worried about the agitations and protests around the country over the move to end petrol subsidy.

Lawan, who said the subsidy could not be transferred to citizens, expressed doubt over the reported consumption of 100 million litres of Premium Motor Spirit (petrol) per day in the country.

He said he was glad to inform Nigerians that Buhari had not told anyone to remove petroleum subsidy.

He said: “Well, it will be of interest to Nigerians to hear what I have come to discuss with Mr President among several other things.

“Many of us are very concerned with the recent agitations, protests and many citizens were so concerned, our constituents across the country are very concerned that the federal government will remove the petroleum subsidy. And for us, as parliamentarians, as legislators representing the people of Nigeria, this must be of interest to us.

“And we have just finished our recess; we had gone home to our constituencies and senatorial districts. And we felt the pulse of our people.

“And I found it necessary to visit Mr President, as the leader of our government and our leader in the country, to discuss this particular issue of concern to Nigerians, and I am happy to inform Nigerians that Mr President never told anyone that the petroleum subsidy should be removed,” he said.

 

Burden can’t be moved to citizens

Speaking further, the Senate president said, “I know and I agree that the subsidy is very heavy. But I think we must never transfer the burden to the citizens.

“I believe that we need to look at the quoted figure of maybe 100 million litres that people claim we are consuming. Is it real? I mean is it either under-recoveries of subsidy? Is it really 100 million litres per day? How on earth are we consuming that? 

“We need to look at this critically and see how we can find the truth. Because I am not convinced that within the boundaries of Nigeria we are consuming 100 million litres, probably neighbouring countries may be benefiting from this.  Can’t we do something about it? 

“It is a failure on us if we are not able to control it, this particular aspect of smuggling of the petrol and then in return, push the burden to the ordinary citizen.”

Lawan, who dismissed the position of the governors of the People Democratic Party (PDP) on subsidy removal, said the leading opposition party that had its chance ought to have done something about it. 

He, however, underscored the need for stakeholders to come together to find a solution to the issue of subsidy.

 

What finance minister said

The Finance Minister had repeatedly said the government could no longer sustain petrol subsidy payments, which currently stand at about N250 billion monthly.

The finance minister explained that the Petroleum Industry Act has a provision that all petroleum products must be deregulated. 

“And in the 2022 budget, we made a provision to assume that at the maximum by the end of June, we must exit subsidy,” Ahmed said.

“So if we look at a cost of about 250 billion per month, and it has been increasing consistently. So, we are expecting something around N120 billion per month from NNPC. And now we are getting to a point where NNPC is remitting near zero.

“And if we don’t stop we will get to a point where they will tell you: ‘Pay me this for managing the fuel provision in the country’.

“So if you take N250 billion times 12 months, that is about N3 trillion. If we don’t remove that, that is what it is costing us. This is money that we can use to apply to health and education,” she had said.

Attempt to get the finance minister to comment on the latest development was not successful as she didn’t return text messages sent to her phone on the matter. 

 

A clog for the PIA

Experts said the effects of the PIA are profound as the NNPC Limited becomes an independent organisation doing business to make profits.

NNPC officials had told the Federation Account Allocation Committee during a meeting in November 2021 that between January and September 2021, it spent N864.07 billion to cushion the price of petrol for consumers.

 

President’s statement will confuse the economy – Expert  

The Lead Economist and Enterprise Partner at SPM Professionals, Mr Paul Alaje, said the president’s statement through the Senate president’s statement will confuse the economy and investors.

He noted that “The fact that the Senate president said so is a surprise and it also means that the president hasn’t also read the budget he signed.

“If he had read both the 2022 budget and the Finance Act, he would have seen that provision had been made for subsidy removal.” 

He said professionally, they had advised that subsidy removal could lead to a hike in prices and a spike in inflation. 

He further stated that for the president to say he has not directed anyone to remove subsidy, “We need to ask questions because this will create some tension and commotion in the polity and the economy. This is not very necessary.  

“We have said time and again that the issue is not just subsidy removal but when are we going to energise the supply side? For instance, the promised N5, 000 monthly to the very poor as transportation subsidy, why don’t you give that money to those with modular refinery and support them?” he asked. 

He also said the federal government should wait for the private refineries to come on stream before removing the subsidy. 

He said investors will look at Nigeria as a country that is not serious. 

An economist and CEO of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, in his reaction said: “I don’t see this government removing this subsidy this year because of political consideration.

“Political consideration is taking precedence over economic consideration. It will only happen if domestic refining comes on stream.”

He further explained that the federal government has already made some provisions for subsidy in the 2022 budget and if it is unable to get sufficient local refining to cushion the effect of the subsidy removal, it may resort to a supplementary budget to see out the year.  

Also commenting, the former Deputy Majority Leader of the Senate, Abdul Ahmed Ningi said that President Buhari should address the nation and retrace his steps.  

“This is one of the many inconsistencies between policymakers, policy implementers of the APC government.   

“Before NNPC comes up with this idea of a subsidy and subsidy removal, the National Assembly should have been engaged, the executive council should have been engaged, and the national economic council should have been engaged.  

“These are issues that Nigerians are so tired of, and probably commenting on. Can he stop it, does he have the power to stop it? If he doesn’t have the power to initiate it, will he have the power to stop it?

“That is the bottom line and these are the main questions. I think the president should retrace his step. This removal of fuel subsidy is an ill wind that blows nobody any good, and he should call it off.” 

Muideen Olaniyi,  Sunday M.Ogwu & Hamisu K. Matazu, Chris Agabi

Dear Reader,
Every day, we work hard to provide readers such as you with the most accurate, up-to-date, and comprehensive information. Quality journalism costs money. Today, we're asking that you support us to do more. Your support means that Daily Trust can keep offering journalism to everyone in the world. Sign up for as little as N1,000 to become a member. Learn more about our membership here

Bank transfers can be made to:
Zenith Bank
1017257739
Media Trust Ltd


Please send details of your bank transfer to the email or Whatsapp number below so that we can contact you.

If you have any questions, please let us know.

Inquiries:
Email: membership@dailytrust.com
Whatsapp: +234 806 990 3410