The Nation Newspaper

Tag: Subsidy

  • Subsidy Removal: FG records over N1trn monthly revenue inflow – Minister

    Subsidy Removal: FG records over N1trn monthly revenue inflow – Minister

    The Minister of Finance, Mr Wale Edun says that the Federation Account is witnessing improved revenue inflow since the removal of subsidy from average of N650 million monthly to over N1 trillion in the last four months.

    The minister stated this on Monday in Asaba at the opening ceremony of a four-day retreat organised for members of the Federation Account Allocation Committee (FAAC) .

    The minister, represented by the Permanent Secretary, Finance, Special Duties, Mr Okokon Udo said the government had for long, realised that petroleum subsidy was not sustainable.

    According to him, subsidy regime eroded revenues that should had been available to fund viable expenditures that were critical to the well-being of the populace.

    The minister said the present administration was mindful of the needs and welfare of Nigerians and assured that it would continue to implement peoples oriented policies..

    “’We all know that achieving tax revenue to Gross Domestic Product (GDP) target of 22 per cent and tax to GDP of 18 per cent by 2026 are parts of the cardinal objectives of this administration.

    ”However,  in doing that we appreciate the needs not to overburden the tax payers by introducing so many new taxes.

    ”What is necessary to be done is to broaden the tax base, simplify and streamline tax administration for ease of collection,” he said.

    Edun added “Among the prior activities of this government after coming into office, was the constitution of a Presidential Committee of Fiscal Policy and Tax Reforns.

    “The committee has submitted an interim report which is full of optimism’’.

    The minister also noted that the present administration was not oblivious of the untold hardship faced by Nigerians, following the removal of fuel  subsidy, and harmonisation of exchange rates.

    He reassured that all the sacrifices made by people would never be in vain.

    ”Government is bent on ensuring that the economy bounces back to normal as we continue to consolidate on recovery efforts with focusing on achieving inclusive economic growth and development,” he added.

    Edun said that President Bola Tinubu-led administration has so far put in place a well-structured palliative measures to cushion the economic consequences of the ongoing reforms.

    On the theme of theme of the Retreat, ”Creating a Resilient Economic through Diversification of the Nation’s Revenue”, the minister commended the choice, stressing that it was suitabl.

    Edun also noted that retreat clearly outlined the urgent need to diversify the nation’s economy.

    In an opening remark, Gov. Sheriff Oborevwori of Delta tasked the federal government to muster the political will by putting necessary policy and institutional framework in place to diversify the nation’s economy.

    The governor, represented by his Deputy, Sir Monday Onyeme said that there was no magic wand to diversify the nation’s economy from over dependence on revenue from crude oil unless concerted efforts were made in other key sectors.

    He noted that the diversification of the nation’s economy must go beyond mere rhetoric to concrete measurable steps by facilitating the non-oil exports such as agricultural products, manufactured goods and services as well as the expansion of the revenue base.

    Oborevwori affirmed that Delta was taking the lead to diversify its economy by creating a Trade and Export unit to drive the process in order to make economic diversification a reality.

    He noted that some schools of thought believed that the discovery of crude oil which led to the neglect of agriculture and other revenue yielding non-oil sectors of the economy was a curse.

    Oborevwori said the country had not properly managed its oil wealth adding that it was worrisome that the oil  sector contributed between five per cent and seven per cent  of the nation’s  GDP.

    He added that the  non-oil sector mostly agriculture, agribusiness, manufacturing  and small scale enterprises contributed 93 per cent to 95 per cent, yet the bulk of public revenue was from the oil and gas sector.

    Read Also: Subsidy removal: Mbah okays N25,000 cash awardfor Enugu workers

    ”Statistics have made it more exigent for the government to grow the non-oil sector to widen the revenue base, nwhile ensuring that maximum benefits were derived from the e oil industry,” he said.

    The governor commended FAAC committee for its commitment to duty by enhancing revenue accruals into the federation account.

    He urged the committee to look into the payment of 13 per cent derivation to oil producing states.

    Oborevwori challenged the committee to use the retreat to address the concerns raised by stakeholders in respect of the new roles of the Nigeria National Petroleum Company Limited, among others by giving better understanding on their roles in the economic diversification of the country.

    The News Agency of Nigeria (NAN) reports that Accountant Generals from the thirty six states and the FCT as well as other stakeholders such as the Customs are attending the retreat.

    (NAN)

  • Subsidy palliative: Why we give priority attention to vulnerable people, by Wike

    Subsidy palliative: Why we give priority attention to vulnerable people, by Wike

    The minister of the Federal Capital Territory (FCT) on Tuesday, October 24, explained that the vulnerable persons in the society were the worst hit by the fuel subsidy removal, hence the need to prioritise their concerns, as palliative distribution continues.

    This was even as he warned all staff and other stakeholders involved in the distribution process, to shun every temptation to divert the palliative items.

    FCTA’s Secretary of Agriculture and Rural Development Secretariat, Lawan Geidam who represented the FCT Minister,  Nyesom Wike at the Abuja Municipal Area Council ( AMAC) distribution Centre in Apo, said the administration would remain committed to initiatives that strengthen citizens’ confidence in government’s policies.

    He said: “The commitment to sustaining the palliative distribution demonstrates the administration’s dedication to providing ongoing support to vulnerable residents in the FCT. The initiative aims to alleviate the financial burden caused by the removal of fuel subsidies and ensure that essential food items reach those most in need”

    Earlier in his remarks, the chairman of AMAC, Christopher Maikalangu urged the administration to allocate more palliative materials to his Area Council, noting that it is the largest out of the six Councils in FCT.

    He warned that all the materials received have been distributed in all the wards, ensuring that it gets to those who deserve it.

    At the Bwari Area Council, distribution center, the Mandate Secretary, Social Development Secretariat (SDS) Ibrahim Aminu, who monitored the exercise, said that the administration will not take lightly any act of sabotage from anyone involved in the distribution processes.

    He said: “Under this phase of distribution, we have brought the items closer to the people to ensure direct outreach, therefore an individual or stakeholder is not allowed to divert the palliatives meant for the poor people, let them get it.”

    The chairman, of the Bwari Area Council, John Gabaya urged economically viable residents to allow the less privileged people to get the items.

    Gabaya noted: “This palliative is only for those that are poor or don’t have means of survival, so government officials and appointees should not partake in the sharing, poverty will come upon anyone that hijack the items”

    Also, in the Gwagwalada area council, the mandate secretary of the Area Council Service Secretariat, Bitrus Garki appealed to residents of the council to support the present administration of President Bola Tinubu and the FCT Minister, Nyesom Wike.

    Read Also: I didn’t divert palliative rice, says commissioner

    He said that the administration has given hope to the natives of Abuja concerning political appointments and the establishment of the FCT Civil Service Commission and that their long demands for a state status to be given to FCT are gradually being achieved.

    According to him, the present administration deserved the prayers and support of the natives of FCT for appointing an indigene of Abuja as one of the Ministers in the present administration and also appointing an indigenous youth as the youngest mandate secretary in the country.

    Also, the chairman, Abu Giri commended President Tinubu and FCT minister, Wike for the palliative which is meant to alleviate the suffering of the vulnerable people in the council.

    Giri who promised that palliative would get to the people that they are meant for, appealed to the FCT Administration to come to the aid of the council, that the council needs massive development.

  • Subsidy removal – What went wrong?

    Subsidy removal – What went wrong?

    By Peter Okediya

    As of this moment, fuel prices have surged towards the N1000 mark, and the dollar to naira exchange rate has surpassed N1000. Palliative measures appear ineffectively sporadic, while the NNPC has once again assumed its role as the primary fuel importer, with assurances of no imminent fuel price hike. This shift raises questions about the previously advocated market-based pricing approach. Some argue that the removal of subsidies is leading to daily savings in the trillions. However, it’s essential to recognize that the concept of subsidy, while not as it was traditionally understood, still persists. This time, it operates in a different context even though fuel prices are substantially higher. This describes the journey thus far.

    In view of the above and the government’s frequent policy reversals, there is a need to have a close look at the management of subsidy removal by the current administration. What factors have contributed to the inconsistencies in subsidy removal? What really went wrong? 

    In the realm of economic policy, both subsidies and their removal represent strategic manoeuvres, and their efficacy is inherently tied to efficient management. These policies yield positive economic outcomes when properly implemented and affordable. Subsidies become problematic when their cost places an excessive burden on government revenue, leading us to question their viability. Likewise, when the promised benefits of subsidy removal fail to materialize for the general population, there is often a desire to revert to the subsidy system. In essence, the effectiveness or inadequacy of both these policy instruments is primarily a result of management decisions.

    Read Also; Report claiming 94% contested posts awaits tribunal incorrect – INEC

    A wrong notion that followed the removal of subsidy was that it benefited only the rich and the elite. Curiously, this notion was often perpetuated by some political figures who presented themselves as modern-day Robin Hoods. However, the reality that emerged after the subsidy’s removal shed new light on the situation. It became evident that subsidy removal had far-reaching consequences that extended well beyond merely affecting the wealthy.  Transportation costs surged, the prices of essential food items and commodities skyrocketed, inflation reared its head, and poverty deepened. It was clear that subsidy removal was not a simple wealth redistribution mechanism; instead, it disproportionately burdened the less affluent. While the affluent managed to weather these economic shifts, ordinary citizens found themselves sinking deeper into financial hardship.

    Characterizing subsidy removal as a noble attempt to ‘eat the rich’ obscured the core issues tied to the abrupt announcement by the president. This is fundamentally an economic matter that transcends political rhetoric and calls for a more comprehensive evaluation.

    In the context of the government’s approach to subsidy removal, there is a concern regarding the prevailing tendency among public servants to address economic challenges primarily through short-term palliative measures. While cash transfers and palliatives serve as valuable stop gap solutions, they often provide only temporary relief and typically lack the substantial impact needed to uplift the average person facing financial hardship. In July when the Nigerian Labour Congress intended to embark on strike action because of the hardship from high fuel prices, the president addressed them promising to disburse various kinds of money to mitigate the hardship, all without a clear strategy for equitable distribution. The NLC took this as a form of compensation despite being aware that palliatives mostly end up in the hands of corrupt persons. When the government predominantly resorts to addressing pressing economic problems through short-lived remedies, it signals a potential absence of the robust commitment needed to resolve the issue comprehensively.

    Another fallacy that began to spread was that the Nigerian economy does not support economic theories. People found it easy to discredit the laws of demand and supply, often treating Nigeria as an exception. They see a bad economic decision and blame the adverse effects rather than hold the decision makers accountable. The subsidy removal initiative initially encompassed multiple components, including a unified exchange rate, the deregulation of the petroleum sector, and the end of NNPC’s fuel importation monopoly. Regrettably, as of today, none of these supplementary measures remain in effect. The exchange rate has surged, impeding importers’ access to foreign exchange, and NNPC has reverted to its role as the exclusive fuel importer. 

    Subsidy removal fails in the absence of prudent and accountable management during the transition towards a market-determined pricing system. While the president’s address may have been perceived as sincere and heroic if fuel pricing were solely a domestic concern, the complex truth is that fuel prices are intrinsically linked to international oil prices. Failing to consider the wider implications of geopolitical factors and global price fluctuations, subsidy removal can impose a significant burden on our citizens, as we are currently witnessing. 

    Subsidy removal fails where inefficiency, leakages, wastes and widespread corruption persist. The original intent behind subsidy payments has often been eroded by systemic corruption and mismanagement. Transitioning from the subsidy era to subsidy removal is hindered when institutional corruption remains pervasive. Additionally, issues like oil theft and cross-border fuel smuggling continue to plague the industry. As a result, Nigeria struggles to meet its OPEC quota of 1.8mb/d and consistently produces below 1.4mb/d. This production shortfall means that the increase in global oil prices doesn’t necessarily translate into higher foreign exchange earnings, and the Nigerian naira remains vulnerable to depreciation. 

    Subsidy removal fails where the Excess Crude Account (ECA) is tapped out. The ECA represents one of the critical accounts where the Nigerian government accumulates surplus revenues resulting from discrepancies between the budgeted benchmark crude oil price and the actual international market prices for a given year. Conceptually, the ECA was conceived as a financial buffer to shield the country from the volatile fluctuations of global oil prices, particularly in today’s turbulent geopolitical landscape.

    However, the current state of the ECA, which stands at a mere US$473,754.57 is indicative of its near depletion. This situation leaves the nation vulnerable to the ripple effects of distant geopolitical events and erratic oil prices. At its core, a robust ECA would help stabilize the national currency, rendering it less volatile, and would alleviate the need for the NNPCL to intervene on a weekly basis in response to price fluctuations. With a well-funded ECA, the foreign exchange market would operate more smoothly, mitigating the challenges faced by fuel marketers in sourcing foreign exchange as market dynamics would tend to self-correct following volatile periods.

    Subsidy removal fails when refineries fail. Refineries are supposed to be available for oil marketers to buy directly and sell to the Nigerian market. However, the current dependence on imported fuel places substantial strain on our foreign exchange (FX) demands, thereby exerting considerable pressure on exchange rates and foreign reserves. It’s evident that foreign exchange rates play a pivotal role in determining the landing costs of fuel. Marketers, quite understandably, cannot buy PMS at a high foreign exchange rate and then sell it at a lower pump price. As the naira weakens, the landing costs of fuel in local currency surge, leading to an increase in the costs associated with subsidy removal, which in turn triggers a corresponding rise in pump prices. Effective subsidy removal strategies are most feasible when our currency is stable, and foreign exchange can be accessed without undue complications. Even when our refineries are functioning optimally, it is important to note that crude oil is still priced in dollars because upstream producers primarily transact in this currency. Implementing subsidy removal before addressing foreign exchange control is like attempting to put the cart before the horse. The sequencing of these actions is essential for an effective strategy.

    Way forward

    Subsidy has to go. However, the current strategy has led to increased fuel prices and uncontrolled hardship, with the state oil company bearing the brunt of the cost to prevent even steeper price hikes. This essentially means that despite the intention to remove subsidies, the current approach has not achieved the desired results and has created fiscal complexities.

    Complete removal of subsidies would indeed result in higher fuel prices than today. However, the implementation of subsidy removal by the current administration was marred by certain missteps. A phased approach, combined with efforts to reduce government expenditures (including political appointments), curb oil theft, and establish effective relief measures for the commercial sector and vulnerable populations, could have yielded a more favourable outcome. Additionally, the introduction of tax incentives such as VAT and personal income tax exemptions, rather than focusing solely on keeping fuel prices low, could have ensured a more sustainable transition. While international factors affect fuel prices, a comprehensive strategy would help prevent us from regressing to the starting point (or a worse situation).

    • Okediya is an energy policy analyst and a sustainable finance thought leader with background in law. 

  • NLC and petrol subsidy protest

    NLC and petrol subsidy protest

    By Mike Kebonkwu

    The Nigeria Labour Congress (NLC) has twice mobilized and demobilized over the economic hardship caused by the removal of subsidy on petrol.  The NLC denied the masses of the opportunity of positive engagement with the government to address and ameliorate the pains and suffering of the masses. Today, the country is gasping for breath as the economy is on free fall.  Crude oil proceeds define the income and expenditure of the country while petrol which has always enjoyed subsidy is the life wire of the economy.  Nigeria has four decrepit refineries that are comatose, maintained at a huge cost with workforce that earns jumbo salaries without production.  The petrol subsidy has also become a huge scam bleeding the country as the behemoth has proved a big monster for any government to tackle. We are jinxed by a cartel in the oil industry and cabal in government manipulating the subsidy regime that have turned vampires sucking the blood of the masses through economic strangulation. 

    The investment figure and payment on petrol subsidy has remained in the realm of speculation; no one can put a fixed figure to it.  Even at that, the colossal sum the government reels off as payment for the subsidy regime is enough to build modern refineries in good numbers across the geo-political zones of the country.  Lo and behold, President Bola Ahmed Tinubu in his inaugural address shot down the subsidy gnome with a silver bullet on May 29: “the petrol subsidy is gone”; no warning, nothing! 

    Since the removal of the subsidy, the economy has been in turbulence and our lives have not remained the same again.  It is not about cutting down on expenses; it is about survival for both the rich and the poor. 

    Read Also: Adamawa offers incentives for dry season farming

    The Nigeria Labour Congress (NLC) and the masses have kicked, asking for palliatives to assuage and soothe the pain as we cut down even on essential lifelines of the most basic nature, food and medicine as coping mechanism.  The economic woes of Nigerians have increased and our local currency, the Naira has plummeted and is at all-time low amongst the weakest in global reckoning. The take-home basic national minimum wage of N30,000 can no longer take an average worker home round the month.  Even at that not every worker under the public sector is covered under the scheme as most state governments are not paying.  With subsidy removal, some states have cut down from five to three working days per week, and introduced shift system to reduce hardship without consideration of such reduction of man-hour on production and productivity of the workforce. 

    However, let it be known that petrol subsidy removal is not a declaration of trade dispute.  It is not an industrial action that belongs exclusively to the domain of labour union; it is an economic issue that touches on the lives of every Nigerian, rich or poor.  The falling Naira value and hyperinflation with a high probability of recession is not a labour dispute or industrial action of any sort; it is an issue of economic survival of every Nigerian.  While it is true that the NLC has always played a historical role in the struggle of the masses of this country, it has always done that in conjunction with other mass movements and professional groups with overwhelming support of the people.  Today, under its present leadership, the NLC has frittered away the gains of labour and the masses of the people through opportunism.

    To digress a little, the year 2023 did not start like any other year for Nigerians; it was an election year with great expectations to break from the ugly past.  Labour had always taken sides with the masses against harsh economic and political issues that touch on the survival of the country not on partisan platform.

    What many people do not probably understand is that those successful struggles of yore were not the brainchild of the NLC.  The Congress was only used as rallying point to galvanize support and carry those in public and formal sector along.  The masterminds were always the students’ movement, the National Association of Nigeria Students (NANS), the Academic Staff Union of Nigeria Universities (ASUU), Civil Society Organizations, Human Rights groups and other Nongovernmental Organizations (NGOs) who mobilize the masses round a common cause. 

    These organizations were led by ideologically driven and committed activists carrying the trade unions along for a common cause of the Nigerian people even at the detriment of their personal safety and comfort.  It was a great sight to see activists like the avatar, late Chief Gani Fawehimi, Beko Ransome-Kuti, Femi Falana and even an Olisa Agbakoba at barricades of NLC protests addressing Nigerians while inhaling teargas from the police.  They were hounded, persecuted and incarcerated by the state because they dared to struggle with the masses. However, successive NLC leadership have gradually compromised the position of labour and became sell-out, doing business with government.

    The labour union went into comatose after Adams Aliyu Oshiomole’s leadership and has been lying prostrate ever since. Suddenly, NLC appears to jerk into life with the last presidential election with partisan posturing with the Labour Party (LP). Due to naivety, desperation and lack of ideological clarity and dynamics of change, that revolution was sacrificed on the altars of religion and tribalism. 

    Comrade Joe Ajaero, current president of the NLC, is a controversial labour activist.  He had always wanted desperately to lead the labour movement but his ideological garment appeared not well laundered and clean, and therefore suspect. That is what the labour movement has become lately anyway after the exit of its crème of tested leadership schemed out of the congress by Adams Oshiomhole.  Now, the NLC has fallen into the hands of a diminutive ideological and intellectual dwarf that does not understand popular struggle of the people. Comrade Ajaero once led a breakaway faction and a splinter group he called United Labour Congress (ULC) out of the NLC for obvious personal reasons.  During the period he also sabotaged NLC protest against petrol subsidy removal when he went into deal with government in 2015.  He has no appetite to engage and sustain a progressive struggle because he is a deal maker.  Whenever you have a wheeler dealer in labour leadership you cannot embark on a successful struggle. This is what we have seen of the NLC mobilizing and demobilizing for strikes and protest and manipulating the misfortune of Nigerians for personal gains. 

    To him salary award to workers is the ultimate solution to the subsidy removal.  Again how many workers earn salary under the public sector?  Palliative of salary award to workers is an invitation to deeper economic crises that will engender hyperinflation, making nonsense of the salaries.  We are a consuming economy with importation not determined by unit of our own currency but the United States Dollars.

    Protest across the globe for the soul of a country is not built around labour union but the people and citizens. It is organized like a moving theatre and carnival with everyone on board, the young, old and elderly; it is not left for charlatans.  Ghana recently embarked on protest against the rising cost of living; it was the Ghanaian people not Ghana Federation of Labour giving ultimatum, mobilizing or demobilizing at the same time. 

    Given the pedigree of the current NLC leadership with a mercantile profile, Nigerians should look another direction to mobilize for change.  This is a wakeup call for Civil Society Organizations, Non-Governmental Organizations, Human Rights and other interest groups to organize, unite and take the destiny of Nigeria from the hand of failed labour. 

    The NLC meddlesomeness in the affairs of the Labour Party leadership at the build up to the election gave the silver bullet to the opposition to shoot down the mass movement; by donning the NLC with the garment of partisanship and decorated with the crown of ethnicity which fitted well.  The NLC have become blacklegs and since lost its bite as a union that had always enjoyed the goodwill of Nigerian masses; no thanks to opportunistic leadership with mercantile mentality. 

    They are hiding under the cloak of extracting N35,000 palliative as gain; to how many Nigerians?  The NLC will be overreaching itself to contemplate any strike or threat of nationwide strike in 100 days because the union has lost face with Nigerians after demobilizing the masses for a popular struggle.

    • Kebonkwu Esq is an Abuja-based attorney.

  • Subsidy removal: Oyo govt to distribute bags of feed to support poultry farmers

    Subsidy removal: Oyo govt to distribute bags of feed to support poultry farmers

    As parts of its continued efforts to cushion the effects of subsidy removal, Oyo state government has revealed its plans to distribute about 11,000 bags of poultry feed to 1,691 poultry farmers in the state.

    Additionally, 1,691 fish farmers; 2537 crops farmers and 2539 cattle, sheep and goat farmers would also benefit, being the first phase of the programme.

    The Commissioner for Agriculture and Rural Development, Mr Olasunkanmi Olaleye, revealed this while declaring open the World Egg Day, in Ibadan, the state capital.

    A statement signed by the Commissioner for Information and Orientation, Prince Dotun Oyelade, quotes Olasunkanmi as saying that the gesture would enhance and promote food security in the state. 

    Olasunkanmi maintained that efforts of poultry farmers in food security cannot be underestimated, hence the state government’s vested interest to regulate the poultry business in the state, as such would help the Ministry have accurate data of poultry farmers and to ensure quality production for public consumption.

    Olasunkanmi explained that 11,000 bags of feeds had been set aside for poultry farmers, saying accurate data could only help the Ministry to extend government’s good gesture to the poultry sector, and that monitoring their activities was necessary due to regular loss recorded in the sector, especially during the period of high cost of feeds.  

    He said: “Part of areas which we are much concerned about is feeding. We will monitor feeds production that are to be given to birds, so as to enhance poultry farmers’ profitability, and to ensure resilient day old chicks, as well as enhance standardisation of poultry products processing in the state.” 

    The Commissioner, therefore, called on the Poultry Association of Nigeria (PAN) to complement government’s efforts in enhancing food security in the state, having in mind that government cannot do everything.

    In his remarks, the Chairman, Poultry Association of Nigeria (PAN), Oyo State branch, Omidokun Oyekunle, said the World Egg Day is celebrated worldwide every 13th of October, to encourage people on the need to eat egg daily.

    Read Also: Oyo APC meets Ganduje in Abuja, pledges support for Tinubu’s administration

    He said an egg is a complete food that contains proteins, vitamins and minerals, as well as fatty acids needed in the body, stressing that poultry business had assisted the Oyo State Government in eradicating poverty, through creation of job opportunities to the people.

    Oyekunle acknowledged that the Oyo State PAN had enjoyed good relationship with the present government compared to former administrations in the state, and assured of its readiness to work with government through the Ministry of Agriculture and Rural Development to curb quackery in the poultry business.

    The team, alongside the staff of the Ministry, donated eggs to pupils of IMG Primary School, Total Garden, Ibadan.

    There was a public display of foods that could be made from egg, at the Iwo-road Interchange, in the state capital, as part of events set aside to celebrate this year’s World Egg Day.

  • No return to petrol subsidy, says NNPCL

    No return to petrol subsidy, says NNPCL

    The Federal Government yesterday dismissed the claim that it has reintroduced petrol subsidy payment.

    President Bola Tinubu announced the termination of subsidy regime during his inauguration on May 29.

    The policy triggered some economic consequences, which led to protests by the organised Labour.

    Last week, the Tinubu administration averted a planned indefinite strike by Labour centres with the introduction of more relief packages.

    The packages include payment of N35,000 provisional wage to all categories of federal workers for six months; payment of N25,000 to 70 million households for three months and freezing of the 7.5 per cent Value Added Tax (VAT) payment on diesel for six months, among others.

    Oil marketers and a section of organised Labour recently alleged that the government had restored subsidy.

    But Nigerian National Petroleum Company Limited (NNPCL)  Group Chief Executive Officer (GCEO)   Mele Kyari told reporters in Abuja yesterday that fuel subsidy had not returned.

    He also said at an energy summit   that Nigeria would by next year become a net exporter of petrol.

    “There’s no subsidy whatsoever. We are recovering our full cost from the products that we import. We sell to the market, we understand why the marketers are unable to import. We hope that they do this very quickly and these are some of the interventions the government is doing. There is no subsidy.”  he said after meeting with President Tinubu in  Abuja.

    The NNPCL boss also dispelled fears of an impending petrol scarcity, saying the country has 1.4 billion litres of the product.

    He explained that the few fuel queues seen in some parts of the country, especially in the North,  could be due to logistics gaps and price differentials among filling stations.

    Noting that there was a scarcity of foreign currency, Kyari expressed optimism that it would soon be resolved.

    Read Also: Medical doctor bags two years in jail for stealing hospital beds in A’Ibom

    He said: “We have seen, in very few states, pockets of queues. They are not unconnected with road situations that force drivers to reroute their trucks through many locations before reaching their destinations.  This creates delays and some supply gaps.  

    “Secondly, because of the full deregulation that we have in this sector, marketers are now competing amongst themselves.

    “When you see some fuel stations reduce price by N2 or N3, customers will naturally run to such station.   When such happens,  people will think that there’s an ominous sign of scarcity.  

    “”We have over 1.4 billion litres of product in our hands, both marine and land.   So, there should be no fear.

    “We are also happy that market forces are now playing out and marketers are competing. But there are a few issues we’re engaging them to resolve alongside other agencies of government. One of them  is  access to foreign exchange.”  

     At the ongoing  Energy Summit by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Kyari assured that there would be energy security in the country when “our refineries” come on board before the end of this year.

    He also told the participants at the summit with the theme  ”Petroleum Downstream Deregulation and Gas Utilisation,” that subsidy almost bankrupted the NNPCL.

    The NNPC chief maintained that while it is difficult to ascertain the actual amount of petrol consumed daily in the country, evacuations from depots dropped by 30 percent since subsidy removal on May 29.

    He said: “I have always said that we do not have credible data on petrol consumption in this country and the reason is very simple. This is because of the absence of technology and cross-border smuggling. There are also other factors in our system that do not allow us to have a fixed number around consumption. But we know the evacuation.

    “Evacuation means every litre of product that leaves the depot is known because the trucks and the volume they carry are known. But once they get out of the depots, the next story is everybody’s guess.”

  • Subsidy removal: You are sabotaging Tinubu’s interventions, Osun APC tackles Adeleke

    Subsidy removal: You are sabotaging Tinubu’s interventions, Osun APC tackles Adeleke

    The All Progressives Congress(APC), Osun State has tackled Governor Ademola Adeleke for allegedly sabotaging the efforts and programmes of the administration of President Bola Tinubu by hoarding the N2 billion intervention fund on removal of fuel subsidy.

    The leadership of the party through its chairman, Tajudeen Lawal on Sunday, October 1, berated Osun government for undermining the programmes of federal government by showing lack of commitment to the welfare of the citizens.

    He said: “It was unthinkable and unreasonable for any of the federating units to hoard the Federal Government N2 billion fuel subsidy removal palliative after two months of receiving the fund.

    Read Also: Wike reacts to trending video of sacked MD of AUMTCO

    He queried  that “what justification does Osun government has to flagrantly deny the people access to the Federal Government fund meant for the specific purpose?Is Governor Adeleke waiting for the people to die before he releases the N2 billion Federal Government fuel subsidy removal palliative?”

    However, the Peoples Democratic Party (PDP) through its chairman, Sunday Bisi berated APC over its claim, saying, “we are not a corrupt government like yours.”

    He said: “Ademola Adeleke is a due process leader who cherishes accountability and transparency in all governmental processes. Procurement order has been placed for palliative materials and they will soon arrive.

    “The palliative plan by Governor Adeleke is very comprehensive and is designed to be sufficient enough to reach the mass of our people. Only people voted out for thieving records will think the Governor from a billionaire background will divert a palliative fund that is publicly declared.”

  • Waiting for benefits of subsidy removal

    Waiting for benefits of subsidy removal

    Sir: With the removal of the fuel subsidy by President Bola Ahmed Tinubu’s administration, which came into office on May 29, it has become obvious that the country was wasting a chunk of its resources on subsidies in the past. These are resources that could have been used judiciously to uplift the lives of vulnerable groups in the country.

    Given the amount of money the country is saving daily from the withdrawal of petroleum subsidies, the federal government should ensure that such money is used for projects that would impact the lives of the people, particularly in critical sectors such as agriculture, transportation and skill acquisition. Much needs to be done to open up the rural areas and thereby ease the evacuation of agricultural produce to urban centres, which constitute the markets for such goods.

    The government should come out quickly and spell out what it is doing to improve the lives of the citizens; in line with its promises that the savings will be channelled into sectors such as education and healthcare. The citizens of other countries where similar subsidies were removed are living comfortably with the type of infrastructure such savings were utilized to create, particularly in the areas of electricity supply, roads, health facilities and education.

    Read Also: Subsidy removal: 26,852 students receive N10,000 each as palliatives in Kwara

    Disbursing such funds directly to state governments may not give the desired results. The federal government should set up agencies to monitor how the states would utilise the funds given to them. It should not hesitate to wield the big stick to punish the states that would not utilize the funds for the purpose they are meant for.

    It does not augur well for Nigerians that the country does not have a national carrier in terms of air transportation. But for the mismanagement which eventually killed the defunct Nigeria Airways, it was an airline that could boast of a large fleet of modern aeroplanes and some of the best pilots in the world. Nevertheless, the attempt by the immediate past administration of former President Muhammadu Buhari to give the country a national carrier was a show of shame.

    The Arabs are now giving out jobs to many other countries’ citizens because of the benefits subsidy removal had in their economies. Let it be so with Nigeria!

    • Ted Isaiah Omobude, Jos, Plateau State.
  • Infrastructure Bank commits N13b to cushion subsidy removal

    Infrastructure Bank commits N13b to cushion subsidy removal

    The Infrastructure Bank will be providing finance to help alleviate the effects of the fuel subsidy removal.

    The bank has earmarked N13 billion for this purpose and will be using the funds to develop transportation systems and road infrastructure.

    A statement issued by the Federal Ministry of Finance said the Acting Managing Director Nkiru Chime and an Executive Director Mr. Andrew Nweke made this disclosure in Abuja yesterday when they visited the  ministry.

    Additionally, the bank has concessions with eight states and has previously provided interventions in the provision of mass transit, road and rail construction in some parts of the country.

    Read Also: Lagos Assembly names standing committees, chairmen

    Nkiru Chime stated that since inception “Infrastructure Bank had intervened in the provision of mass transit, road and rail construction in some parts of the country and the bank had concessions with Government particularly with eight states”.

    Chime added that The Infrastructure Bank has put in place funds to  convert cars using petrol to “Compressed Natural Gas (CNG) vehicles to cushion the effects of fuel subsidy removal”.

    On his part, Mr. Andrew Nweke spoke about an intervention that will impact urban development. He said that the “Infrastructure Bank would engage in road infrastructure development in collaboration with the Federal Government to alleviate the impacts of fuel subsidy removal.

    Responding, the Permanent Secretary Special Duties of the ministry Mr. Okokon Udo assured the bankers that “the Federal Government would create an enabling environment for businesses to thrive in the nation’s economy in order to reduce the adverse effects of subsidy removal”.

    The Permanent Secretary stressed that the ministry was determined to work in partnership with the bank towards uplifting the living standards of Nigerians.

  • Subsidy removal: We’re working with drivers to effect changes

    Subsidy removal: We’re working with drivers to effect changes

    Tope Akinwunmi Country Manager, Uber Nigeria, in this interview with Gboyega Alaka, speaks on the organisation’s various safety measures the ride-hailing company has introduced to protect clients as well as its efforts towards cushioning the effects of fuel subsidy removal on the local operations.

    Your new introduction Uber Go only operates in select places in Lagos, even though it is cheaper and affordable. What plans do you have to make it available across a complex city like Lagos?

    Delivering reliability to riders and drivers is essential for us: we believe the Uber network should work for everyone in the community. Therefore, before we expand to other parts of Lagos/other cities, we monitor the product to ensure the marketplace remains healthy and balanced, and that the rider and drivers’ experiences are as seamless.

    Uber Go is a more affordable ride option for consumers that uses smaller, fuel-efficient hatchback vehicles to increase rider demand and open up new earning opportunities for drivers. We are constantly working to expand our services across Nigeria and Africa as a whole, and we are excited about what the future holds. We also have other products such as UberX available to riders in all the cities we operate in Nigeria.

    With the rise in cost of fuel due to subsidy removal in Nigeria, many have concluded that fares will skyrocket, possibly three-fold like the price of fuel. What have you done to make your service affordable? Or assist your drivers in this regard?

    As a global business that operates locally, and at a time of unprecedented economic uncertainty with inflation peaking around the world, we continuously monitor local dynamics, as well as regularly engage with drivers to see what changes can be implemented and when. In June, we implemented two fare adjustments to reflect existing economic conditions.

    Security-wise, what assistance are you offering, especially in the area of tracking, to ensure that drivers and their vehicles are safe and secured?

    Read Also: Subsidy removal: Reps blasts NLC over claims on palliatives to lawmakers

    We put safety at the heart of everything we do and always look at ways to improve safety on the platform. Not only are we passionate about helping people travel from point A to B, we are committed to being a leading safety innovator, using new technology to improve safety standards for all riders and drivers operating on our platform.

    We have launched several industry-leading safety features over the years, including features dedicated to the Nigerian market. We have the In-App emergency button, which dispatches armed security to your location within minutes of an emergency.

    We also have the RideCheck, which uses data and other sensors in drivers’ smartphones. Our technology can detect possible crashes or if a trip goes unusually off course. This technology will continue to evolve, and we are working to add additional scenarios to RideCheck. Helping keep millions of riders and drivers around the world safe is a huge responsibility with unique challenges.

    In addition, we have the Audio Recording, which allows riders and drivers to record the audio of a trip when faced with a safety or security incident during a trip by pressing the shield icon on the app and selecting “Record Audio”.

    The GPS tracking of every trip, giving people the ability to be able to share their trip information and ETA in real-time is also available. This is in addition to Trusted Contacts, which allows riders to share five friends and family members as Trusted Contacts to be prompted to share trip details with them during every ride. And then of course, we have strict Community Guidelines, which act as a “how-to” for both riders and drivers. These Guidelines apply to everyone who uses Uber’s platform, including drivers and riders.

    Now that you have huge competitions, (Bolt, even Lagride; maybe there are others), what would you say makes you unique? And how do you hope to maintain your position as market leader in the ride hailing business?

    We know that we face significant competition across local markets. However, since we compete in many markets around the world and understand what it means to strive to remain competitive, we are able to bring in best practices, leveraging our global scale and technology and apply them in the region.

    A customer once complained about the 80km/hour speed limit in UberGo, which he said makes occupants of the vehicle vulnerable, especially in situations where they need to speed away from danger. Is there any way this can be dealt with?

    At Uber, we have harnessed the power of technology to make the platform safer for everyone.  The following safety measures have been put in place to ensure road safety on the platform: This includes Speed Limit Alerts, which is a visual reminders to help drivers stay at a safe speed.

    We also have Driver Hour Limits, which is designed to help make roads safer for everyone. With this device, Uber automatically locks drivers out of the app when they reach the consecutive driving hours limit. They must then take a substantial break before they can drive again on the app.

    There is also this criticism that the Uber standards have fallen – no longer good, air-conditioned cars; operators no longer clean vehicles before picking passengers; even the courtesy they were known for is said to be declining. Sometimes, they even show up with cars different and worse than the one listed. How do you ensure or maintain these standards, which won people’s hearts at the onset?

    Uber wants every trip to be enjoyable. To ensure that Uber provides riders with the right quality and experience when requesting a ride on the Uber app, we have specific vehicle standards (including quality & age) that drivers need to follow as part of our requirements to sign up. Every vehicle must also pass an independent annual inspection. 

    The vehicle eligibility criteria differs per product offering to ensure the experience is what riders expect. We will notify drivers when their current vehicles no longer meet the minimum quality standards, so they can make the necessary changes. To ensure drivers can continue earning via the Uber platform, they will be eligible to accept other product trips, depending on the model year of their current vehicle.

    In addition, riders are empowered to report any vehicle issues via the in-app help button. When a report is received regarding the condition of a vehicle, we temporarily restrict access to the particular driver, who would then be required to have their vehicle undergo a vehicle inspection before being allowed back on the platform.

    There is even this argument that Uber may be losing interest in the Nigerian market, true or false?

    Uber has transformed how we move across our cities as well as how we move goods from one place to another. Uber has found a good fit in Nigeria, as it provides a platform for independent and flexible earnings for drivers and for riders, a convenient, reliable means of mobility. Since entering the market in 2014, we have created economic opportunities for over 10,000 drivers, expanded into 12 cities across Nigeria namely Lagos, Abuja, Benin City, Port Harcourt, Ibadan, Warri, Enugu, Kano etc.

    We believe that each country’s needs are unique, so we take the time to understand each of the market needs so we can be responsive and adapt accordingly. Our product portfolio is reflective of this. Aside the Uber X and Uber Go, we have the Uber Package, which is one of our most popular products available in the country. Package leverages technology to provide an affordable way for peer-to-peer deliveries. This contactless delivery provides a cost-effective, on-demand, no-contact delivery solution for individuals and small businesses. The UberX Share helps reduce costs for riders and increase demand for drivers. An Uber’s shared rides offering allows riders to save up to 30% of the trip fare when matched with a co-rider heading in the same direction, and where a match is not possible, they will still be able to save 5% from their ride.

    The introduction of UberX Share allows us to proudly demonstrate the power of our platform, understanding the ability to match rider destinations while delivering convenience and affordability. We are a global company that builds locally; and in Nigeria, we tapped into the local culture of car-pooling when moving around, which makes this product a great fit for the market.