By Lateef Adegbite
When Vice President Kashim Shettima, who incidentally was a former governor of the north eastern state of Borno, home of the Islamic Fundamentalist Group, BokoHaram and the Islamic State Of West African Province, ISWAP, said that ‘’it is not going to be a rosy start for the Administration because of the oil subsidy removal programme of the immediate past Administration of Muhammadu Buhari , nobody no took him serious.
Shettima, who may have spoken the mind of Bola Ahmed Tinubu, the Lagos state born Nigerian President, had said prior to the inauguration of the new Administration on May 29, 2023, that there are certain decisions that the Administration will take, which may not be too comfortable with the people.
Barely 24 hours of assumption of office, Tinubu had dropped the first bombshell that there will be ‘’no more payment of fuel subsidy’’, confirming what Vice President Shettima, had earlier said that the problem of subsidy which had remained an albatross on the Nigerian government over the years would be done away with once and for all.
Hajia Zainab Ahmed, immediate past minister of Finance , Budget and National Planning had said that the government was spending about N250 billion monthly to subsidize the importation of Premium Motor Spirit, PMS, popular, petrol, into the country because all the country’s four refineries located at Onne, close to Port Harcourt, Capital of Rivers state, Kaduna and Warri with a combined capacity of 445,000bpd have become moribund.
The erstwhile minister of Finance, had said that ‘’the subsidy was costing the government between N350.00 and N400.00 per litre’’, noting that’’ it has grave implications for the economy as such funds could have been used to execute capital projects ‘’ to bridge the infrastructural deficits in the country’’. The former Buhari’s Administration was said to have made a budgetary allocation of N3.6 trillion to cover January to June, 2023 subsidy payment on petrol importation into the country.
In 2022, the Nigerian National Petroleum Corporaton, NNPC, now baptized Nigerian National Petroleum Company Limited, NNPCL, with the passage of the Petroleum Industry Bill, PIB, signed into Law by the erstwhile Nigerian President in August, 2021, was aid to have spent N4.39 trillion, or $10 billion on the importation of fuel into the country.
The former minister of Finance had said that the immediate past President could not stop the subsidy payment because the National Economic Council, NEC, under the Chairmanship of former Vice President Yemi Sinbajo, which had taken a decision at its, meeting, a week to the handover to the new Administration that ‘’ it was not a favourable time to remove the subsidy’’.
Many had expected President Tinubu to queue into the decision but had acted out the script of the former Katsina state born Nigerian President, who had a plan to remove the subsidy before the Administration winds down on May 29, 2023, but could not do it, thus giving his successor to do it.
In removing the subsidy, the former Lagos state governor, who could not hide his feelings had said that ‘’the 2023 budget did not make any provision for fuel subsidy’’ which may not be true going by Hajia Ahmed statement that N3.36 trillion was provided as subsidy payment for the first six months of 2023.
President Tinubu may have been encouraged to remove the subsidy with the completion and commissioning of the 650,000bpd, Dangote refinery located at the Lekki Deep seaport , in Lagos and theexpected completion of the of the 200 bpd, BUA Group, refinery and Petrochemical plant ,000, sited in Akwa Ibom state due for completion and commissioning before 2025 that would produce wide range of products including PMS for both local and West Coast markets , including the Central African countries markets.
The decision by the Tinubu’s Administration to stop the payment on Petrol subsidy may not have come to Mele Kolo Kyari, led NNPC, by surprise as it has welcomed it. This is because the Nigerian oil octopus because it has been on the neck of the past Administration to remove the subsidy because it was eating deep to its profits. The Company had declared that ‘’the removal of the fuel subsidy is in the best interest of the country’’, noting that ‘’ it will help improve the economy’’.
Until President Tinubu took the decision to stop the subsidy payment on Monday, May 29, 2023, the Nigeria oil octopus, was said to have deducted N319.18 billion from the Federation Account as subsidy payment for petrol for the month of June, 2023. It was not surprising why Kyari, the Group Managing Director, GMD, of NNPCL, could beat its chest that ‘’it has enough product to supply the country for the next 30 days’’, assuring Nigerians that it will be monitoring the supply and distribution network around the country to prevent diversion of the product.
Ever since the President Tinubu made the pronouncement that the era of payment of fuel subsidy has ended, many filling stations in Lagos, the nation’s Commercial nerve centre and other parts of the country were said to have closed down to forestall the panic buying’’. Kyari, the NNPCL, GMD, had said that ‘’there was no need for panic buying given long queues that has been noticed in Abuja, the Federal Capital Territory, FCT.
In Osun , Ademola Adeleke, the governor , who may have also noticed the scarcity of the product in the state, was said to have threatened ‘’to seal off filling stations hoarding the PMS and ‘’the dealers prosecuted for crime of economic sabotage’’.
Worried that the abrupt removal of the subsidy by the incumbent Nigerian President which may push up the price of a litre of petrol to as much as N500.00, as well as have an immediate impact on the prices of goods and services , that would further increase the poverty level and economic challenges, in the country may have pitched the Trade Union Congress, TUC, Leadership against the government.
The TUC, Leadership had argued that Tinubu cannot ‘’solely take the decision to remove the subsidy payment on petroleum products importation into the country’’. The Union asserted that the President ought not to have been a hurry to stop subsidy payment but still ‘’give room for dialogue, Consultations and stakeholders engagement’’, before taking any decision on the delicate matter.
Festus Osifo, the TUC President and Nuhu Toro, the Secretary General, had said that ‘’there are host of issues that need to be amicably considered and resolved before taking the decision that the era of subsidy payment has ended’’.
With the removal of the subsidy payment by the Tinubu’s Administration, there are fears in both official and unofficial circles that the Leadership of the TUC and the Nigerian Labour Congress, NLC, may drag out their members on the streets to protest against the withdrawal of subsidy payment on importation of fuel into the country.
The two Labour Unions had repeatedly said that the removal of subsidy on petrol would increase the pump price of the product and lead to the exploitation of the people through unregulated and exploitative deregulated prices.