Removal Of Fuel Subsidy Regime : Buhari Dumps The Governors, Makes A U-Turn

 By Lateef Adegbite

Those who think that the governors of the 36 states of the Federation, care for their fellow Nigerians would be disappointed. This is because the governors’ support for the removal of fuel subsidy regime policy by the government.

 While the Federal government has diversified their sources of revenue generations, the state governors are still looking out for money that enters into the Federation Account from the oil and non –oil sectors that would be shared monthly by the Federal Accounts Allocation Committee, FACC. The governors may have supported President Muhammadu Buhari, a retired General decision, to abolish the fuel subsidy regime in order to have enough money to share from the Federation Account.

Godwin Obaseki, governor of the south-south state of Edo, who many had expected to be on the side of the masses because of the support he had always enjoyed over the years from them may have spoken out the mind of the governors when he said at the end of thir recent National Economic Council, NEC, meeting, chaired, Yemi Osinbajo, the Vice President, that ‘’the fuel subsidy regime is eating deep into funds left for distribution to the Federal, states and Local governments by  FAAC’’.

Hajia Ahmed: Minister Of Finance And Arrow Head Of Fuel Snsidy Removal

 Indeed, the governors may have been encouraged to key into Hajia Zainab Ahmed, minister of Finance, Budget and National Planning, campaign for fuel subsidy regime policy removal because of the alleged poor allocation to the states between September and December 2021. Take for instance, in December alone, 2021, FACC, was said to have shared a total of  N675,946 billion  to the Federal, states and the LGAs, compared to N671,910 billion , in the month of November, 2021.

 The governors may not have found the shared amount encouraging because of the payment of subsidy claims to the refined Petrol importers. Financial analysts fear that the governors had allowed themselves to be deceived by the financial figures obtained by Hajia Ahmed, minister of Finance, and which was presented at the NEC, meeting,  to show that in 2021 alone, the Federal government spent N2.1 trillion to pay subsidy claims to the marketers . The minister may have won their heart when she disclosed that ‘’this is money that may have shared by FACC, to the three tiers of g government and support developmental efforts.

The governors may have further been carried away by the minister’s claims that’’ if the fuel subsidy regime  was not removed ‘’not many of the states would be able to pay the Civil servants’ monthly salaries , let alone fulfill their electioneering Campaign promises’’.

It was not surprising why the governors had mounted a close monitoring on NNPC, now Nigerian National Petroleum Company Limited, NNPC, with the passage of the Petroleum Industry Bill, PIB, which had been assented to by President Buhari, in 2021, to ensure that the N3.36 trillion revenue target set for it this fiscal year was fully paid into the Federation Account in order to make more money available for them to share monthly.

 They were said to also looking forward to the Hameed Ali, a retired Colonel led Nigerian Customs service, NCS, to pay its N2.2 trillion, target that had been increased to N4.1 trillion by the Customs’ Management Team, thus putting the Area Comptrollers on a high jump to meet their monthly targets, as they had tightened security and blocked areas of revenue Leakage.

Okonjo-Iweala: Former Minister Of Finance And Now, DG, WTO

 Many had expected the governors to cast their mind back to what Ngozi Okonjo- Iweala,   a former minister of Finance and Coordinator of the Economy during Goodluck Jonathan’s Administration and now Director General, World Trade Organisation, WTO, had said on the issue of cleaning up fuel subsidy payments in 2012 .

Given an insider iformation to the subsidy regime policy, in Nigeria, she had said that the government had used it’’ to pay marketers who import refined petroleum products into the country ‘’ the price difference between what obtains in the International market and the local  market price, being  the subsidized market price that the government had agreed  for the products , particular, Premium Motor Spirit, popular, Petrol .

According to the former minister of Finance, ‘’payment of the subsidy claims to markets was a big fraud’’ ’’, that needed to be tackled headlong in her second term as minister of Finance and Coordinator of the government in Nigeria in her second stint as Finance minister I 2012. She noted that the Administration had received a total subsidy claim of about $11 billion, compared   to $2billion in 2006, during  Obasanjo’s Administration .

 Worried by the phenomenal increase in the fuel subsidies payment claims by 143 marketers, who claim to have imported the refined products may have encouraged her to seek the approval of the then President Jonathan’’ to Audit the Petrol Subsidies Accounts’’.  She was said to have gotten the approval and t the backing of the Economic Management Team to go ahead with the probe.

The ministerial Audit may have exposed the high level of fraud associated with the management of the fuel subsidy Accounts. The external Auditors were said to have audited $8.4 billion of the fuel subsidy Accounts and discovered N2.5 billion of fraudulent claims.

 The discovery of the high level fraud associated with the management of the fuel subsidy Accounts in NNPC, may have encouraged the then Finance minister who had the Presidential backing to have refused to pay the subsidy claim, forcing the marketers and their Collaborators to fight back.

The then Jonathan’s government was said to have  decided to clean up the whole’’ fuel subsidy payment mechanism   and replace it with a more transparent system’’ but this did not go down well with the marketers with vested interest as they fought back to frustrate the new  system.

The Katsina STATE born Nigerian President may have  taken a cursory look of the management of the fuel subsidy Accounts by past Administrations that he has concluded arrangement with NEC, to finally  deregulate the sector, thus keeping away from the problem  of subsidy payment, which had eating deep into the country’s slim economic resources over the years.

Lawn: Snate President

Although, the Nigerian President and his economic Management Team had agreed to deregulate the sales of refined petroleum products across t the country, Ahmad Lawan, the Senate President had told those that care to listen that the retired Army General has not directed NNPC  or the Department of Petroleum Resources, DPR,  to implement the removal of  fuel subsidy regime for now.

He may have spoken the mind of the retired Army General as Hajia  Ahmed, the minister of Finance, who had said that fuel subsidy payment was only factored  for the first  half of 20222, meaning that in the second half of 2022, Nigerians , it  would no longer be accommodated has made U-Turn.

 She may save the country from being thrown into crisis by bowing to pressure from the governors to remove  fuel subsidy for their selfish interest  as she had revealed  of plans by the  government’’ to make additional  provisions  for fuel subsidy payment  in the budget, beyond June 2022.  The minister may have been forced to turn her back on the governors who are desperate for more allocation from the Account following the intervention of Lawan, the Senate President  and the rising price of Crude oil in the international oil market. The Senate President, who has the ear of Buhari, was said to have convened a meeting,  that  was said to have been attended by   the Finance minister, who is at the centre of fuel price increase, Temipre Sylva, a former governor of Bayelsa, Jonathan home state and now , minister of state, Petroleum Resources,  and Representatives of the Oil marketing Companies.

Sylva, may have tried to save the face of the retired Army General for the policy somersault, when he  disclosed that the government had  to reconsider its decision on the fuel subsidy removal because  because ‘’its decision  on the planned  fuel subsidy removal  after the 2022 budget  was passed by the National Assembly’’.

Even the tough talking minister of Finance  had said that though  ‘’fuel subsidy  was provided  for in 2022 budget  from Jabuary to June, 2022,  but after Consultations  with stakeholders  and in view of the high inflation  and economic  hardship  that  may follow the removal of the subsidy regime,  additional provisions  would be made  beyond the initial period’’.

Hear her: removal of fuel subsidy at this period was untimely as it would worsen the condition of more Nigerians, described by the World Bank as living below the poverty level. Recaal that Abdulsalam Abubakar, a retired Army General and former Head of State, who has the ear of the Nigerian President had opposed the fuel subsidy removal stressing that it would worsen the poverty level of 18 million Nigerians and heighten the insecurity situation in the country.

 The Opposition  people’s Democratic Party, PDP,  may have waited to use the implementation of the removal  of the fuel subsidy regime by the ruling APC, to turn it as a Campaign issue  in the 2023, general election to turn the mind of the masses against the party.

 Moreso, pundicts could not understand why Buhari and the then APC, which was in the Opposition, in 2012,  and  had opposed former President Jonathan  decision to remove fuel subsidy,  accusing the Administration of ‘’ planning to siphon   the proceeds realised’’, is now in support of removal of fuel subsidy’’. Vintage Buhari

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