By Adewole Kehinde
For clarification purposes, the Petroleum Industry Act reads, “The Minister shall within six months from the commencement of this Act, cause to be incorporated under the Companies and Allied Matters Act, a Limited Liability Company, which shall be called Nigerian National Petroleum Company Limited.”
Published 6 hours ago on January 21, 2022 By Opinion Nigeria
“President didn’t order fuel subsidy removal, Lawan clarifies” was the major headline in the media on Wednesday according to the President of the Senate, Ahmad Lawan, after meeting Buhari at the Presidential Villa, Abuja, stating that he had gone to convey the feeling of constituents to him on some concerns, including the proposed removal of subsidy.
I really felt disappointed listening to the President of the Senate, Ahmad Lawan, who should know the implication of the Petroleum Industry Act himself and his colleagues passed.
It will be recalled that President in August 2021 a month after the National Assembly passed the PIB that recommends the deregulation of the petroleum sector, which also include subsidy removal, the same President of the Senate, Ahmad Lawan and the President Buhari that signed the bill into law are now saying the President never gave approval for subsidy removal.
I want to categorically say that President Buhari on Monday, 16th August 2021 gave that approval as soon as he signed the Petroleum Industry Bill into law.
For clarification purposes, the Petroleum Industry Act reads, “The Minister shall within six months from the commencement of this Act, cause to be incorporated under the Companies and Allied Matters Act, a Limited Liability Company, which shall be called Nigerian National Petroleum Company Limited.”
With the above, Nigerian National Petroleum Company Limited is already in motion with the approval of President Buhari, who doubles as the Minister of Petroleum Resources.
The Petroleum Industry Act further said, “Nigerian National Petroleum Company Limited and any of its subsidiaries shall conduct their affairs on a commercial basis in a profitable and efficient manner without recourse to government funds”.
This means government funds will not be used in paying for subsidy and Nigerian National Petroleum Company Limited is not expected to run at a loss the way the old NNPC did.
In fact, Nigerian National Petroleum Company Limited will be breaching the Constitution by paying subsidy on Premium Motor Spirit, also known as Petrol.
It is even more appalling to hear those words come from the President of the Senate when Nigeria already lost more than $50billion dollars in the Petroleum Sector, due to our inability to pass the PIB for decades.
The Petroleum Industry Act provides Nigeria, the twilight opportunity to attract meaningful Investments and wealth in the transitory realities of the global Petroleum Sector, to address our huge infrastructural deficit.
Statement such as “President didn’t order fuel subsidy removal” coming from the Chairman of the National Assembly, after painstakingly passage of the Petroleum Industry Bill into Law, goes against Section 67 of the Petroleum Industry Act that says “the administration and management of petroleum resources are to be conducted in accordance with the Act and principles of good governance, transparency, and sustainable development in Nigeria”.
Subsidy removal will save Nigeria about 1 Trillion Naira yearly as the Federal Government has been running huge budget deficits that could have been avoided if money budgeted for oil subsidies was allocated to other critical projects.
Subsidies should be used to spur investment in activities that raise the productive capacities of an economy (such as education, health, entrepreneurship, and infrastructure). They should be targeted at strategic sectors of the economy. They should not be used to finance non-durable consumption items like petrol.
Oil subsidies are inequitable, as they transfer the national wealth to those who own several cars and add little or no value to the national economy.
In lieu of subsidies, the government should invest massively in public transportation and boost the transport allowances of public-sector workers.
Removing fuel subsidies would also be good for the environment and safety on Nigerian roads. When motorists pay the full economic price for petrol, they will emit less pollution and reduce the incidence of road accidents.
What the leadership of both Executive and Legislature should be telling Nigerians is that the removal of fuel subsidies favours the poor and eliminates one of the several perks that the Nigerian elites undeservedly enjoy.
Adewole Kehinde is a Public Affairs Analyst based in Abuja and can be reached via 08166240846, 08123608662
