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… Rewane seeks clarification
By Adewale Sanyaolu and Fred Itua, Abuja
Strong indications have emerged that the Federal Government may soon resume the payment of petrol subsidy before mid 2018.
Although it is still unclear when this will happen, findings by Daily Sun revealed that the outcome of the ongoing interface between the Senate and stakeholders in the oil and gas sector would determine the next policy direction of the Buhari administration on the issue.
The Chairman of the Senate committee on Petroleum Downstream, Senator Kabiru Marafa, who spoke to Daily Sun, said there was no provision for subsidy payment in the 2018 budget currently before the National Assembly.
He said no formal request has been made by the Government on whether or not it would resume the payment. Marafa did not, however, rule out any possible resumption of the subsidy.
He said his committee and the entire Senate would consider request from the executive in that regard. According to him, any action or decision that will put a permanent end to the perennial fuel scarcity will be considered.
“My friend, we are not there yet. As you are aware, we are currently meeting with officials of the Nigerian National Petroleum Corporation (NNPC) and other people involved. For now, I cannot tell you if we will approve any resumption of subsidy payment.
“If it comes to that, we will do what is best for Nigeria and Nigerians. If at the end of this meetings, the government wants to formally request that we approve subsidy funds, we will consider it. But for now, they have not made such request,” Marafa said.
A member of the committee who spoke to Daily Sun, said, lawmakers may include in the final report which is expected to be laid on the floor of the Senate, that the Federal Government should resume payment of subsidy on petrol.
He hinted that the Senate will take a position and formally communicate it to President Buhari who is expected to act on it. He said the planned subsidy will only last for one year, until local refineries fully come on stream June next year.
The lawmaker, who does not want to be named, said members of the committee would meet this week to brainstorm on key points made by players in the oil and gas sector and reflect same in the final report.
The Senate committee on Petroleum Downstream, last Thursday, held an investigative public hearing with stakeholders in the oil and gas industry. While the hearing lasted, Marafa did not allow any member of the committee to ask questions related to payment of subsidy.
Despite the fact that the Group Managing Director of NNPC, publicly admitted that the Buhari administration was subsidising petrol, the issue did not come up during the televised hearing.
Recall that the Federal Government ended subsidy payment in 2016, describing the scheme then as a fraud and said the country was losing huge amount of money.
Meanwhile, the Managing Director of Financial Derivatives Limited, Mr. Bismarck Rewane, has told the government to come out clean in the ongoing debate on fuel subsidy.
Rewane said this in an interview on Channels Television, adding that government has to be transparent and tell Nigerians how much is being paid for subsidy.
“What the government has to do is come out clean and say this is the amount of subsidy we are paying – this is how we have to do it because the people have to be carried along,” he said.
“It is not possible at this point in time to have a subsidy-less petrol price because it is so critical – we have to come out.”
He wondered why after two years of adequate supply of fuel, the country started to experience shortage of the commodity.
Rewane said government needs to be creative to be able to tackle the fuel scarcity being experienced in parts of the country.
“Some say the shortage is contrived, some say it is sabotaged, some say it’s ineptitude of logistics and planning but what is clear is that the parameters that were used on May 15, 2016, when the price of N145 was arrived at, were that the exchange rate was N285.
The price of oil at that time was about $42 a barrel and the landing cost was at about the same range about 145, now circumstances have changed,’’ he said
According to him, the exchange rate has been devalued significantly, explaining that the price of oil is at $68 a barrel today and therefore, the landing cost cannot be the same.
On the purported plan to increase fuel pump price, Rewane said such would be “economically intolerable”.
“The minimum wage was determined in 2011 at N18,000 which was $200 at that time – it is barely $40 today. If you increase the price of petrol which is a subsidised price today, you will be imposing a lot more hardship on the people,” he added.
“It is not politically expedient, it is economically intolerable.”
But, the Nigerian National Petroleum Corporation (NNPC) has said it has no plan to execute an increase in the pump price of Premium Motor Spirit (PMS), otherwise called petrol.
‘‘NNPC wishes to assure motorists and other consumers of petroleum products that the pump price of petrol remains N143 per litre in NNPC Retail outlets and N145 in other fuel stations, while PMS ex-depot price of N133.28k per litre to marketers is still being maintained.
The corporation said In the last few weeks,it has increased its daily truck-outs of PMS per day to ensure petrol sufficiency across the states of the federation.
‘‘Motorists and other consumers of petroleum products are assured that NNPC has a robust sufficiency of petroleum products to cater for their daily consumption.
Marketers are hereby cautioned against hoarding or diversion, as law enforcement agencies have been enjoined to deal appropriately with defaulters.”
The denial of NNPC on whether it plans to increase petrol price or not may not be unconnected with the statement credited to the Group Managing Director of NNPC, Mr. Maikanti Baru and the Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, that the landing cost of petrol is now N171 per litre as against the approved retail price of N145 per litre.
