Fresh fuel crisis looms as finance commissioners seek removal of petrol subsidy

The APC distances itself and its finance commissioners from any decision to cut fuel subsidy.

Two years after a nationwide protest forced the federal government to reverse its decision to remove subsidy on petrol, finance commissioners from Nigeria's states met and asked for the removal of the subsidy, their chairman has said.

The official pump price of petrol across Nigeria is N97 per litre. A total removal of the subsidy will raise the price to about N140 per litre.

The announcement of subsidy removal on petrol by President Goodluck Jonathan on January 1, 2012 triggered nationwide protests that forced the government to reverse the policy.

However, briefing journalists at the end of the meeting of the Federation Account Allocation Committee, FAAC, on Thursday, the chairman of the Forum of States Finance Commissioners, Timothy Odaah, said the commissioners agreed that it was in the best interest of Nigeria that the subsidy regime is brought to an end.

"The subsidy should be removed so that every state or any member of the federating unit sharing from FAAC will take its own money and determine how to use it or grant subsidy to the level that it can afford," Mr. Odaah, who is the Ebonyi State Commissioner of Finance, said.

Mr. Odaah's statement came barely two days after Nigeria's largest opposition party, the All Progressives Congress, APC, warned of surreptitious plans by the Peoples Democratic Party-led federal government to increase the pump price of petrol. The party accused the federal government of allowing the current petrol scarcity across the country to continue as a way of justifying an increase in official price.

The federal government, through the petroleum minister, Diezani Alison-Madueke, later denied that there were plans to increase the price of petrol.

Mr. Odaah, however, said the commissioners agreed that the subsidy was not solving the problem it was meant to solve and therefore called for the end of the regime. He said Nigerians were being deceived into believing that the subsidy was necessary.

"Nigerian Labour Congress (NLC) and majority of the Nigerian populace appear to have been deceived into clamouring for subsidy because of syndicated projects and programmes that were put in especially with regards to easing transportation problem and likewise tariffs on power supply, but you will discover that it's the average poor man that suffers," he said.

Mr. Odaah said the subsidy system "robs Peter to pay Paul by making the rich to grow richer and the poor to go poorer."

He said although the commissioners agreed at the FAAC meeting to set up a committee, they had resolved that subsidy be cut.

"A committee for subsidy has been constituted and it is to look into the impact of subsidy whether it should actually be allowed, but I want to tell you that the resolution we took is that subsidy should be removed," he said.

To brief governors, Jonathan
In order to actualise its desire to end the subsidy regime, Mr. Odaah said the commissioners' forum would brief the state governors and President Jonathan on their resolution.

He said the forum would "formulate a letter that will be sent to the Nigerian Governors' Forum and we are going to brief our respective governors and we will inform the President. We know it will be very difficult considering the critical period we are in."

Mr. Odaah adduced further reasons for the decision taken at their meeting.

He said, "There are some states that are fully industrialized and you have many industries and you use this subsidy in that particular place and the people who benefit more are those from the states that are industrialized because of the fuel consumption of those industries which use more of the fuel subsidy unlike the states that are under industrialized.

"Marketers are not following the intention of the government because it has created a very big market for them in certain ways. This is because transparency is not coming up. There are some people that are eating from the subsidy to the disadvantage of others."

The commissioner continued. "The resolution at FAAC, and that has been the position of the finance commissioners, is that the call should be made to the President so that he will have to review and reconsider the position of this subsidy and remove it."