10 October 2015, Lagos – The Chief Executive Officer of Financial Derivatives Company Limited, Mr. Bismarck Rewane, and other discussants at a one-day conference held yesterday in Lagos on ‘Oil Subsidy Regime and National Economic Health,’ have called for a review of the subsidy regime to ascertain its sustainability and relevance to the welfare of all Nigerians.
Delivering a paper on ‘Oil Subsidy and Implications for National Economic Growth’ at the conference, which was put together by the School of Media and Communication, Pan-Atlantic University, Rewane noted that with the drop in the price of crude oil by over 50 per cent, it has become imperative for the government to review the subsidy scheme.
According to him, the drop in the price of crude oil has reduced the cost of petroleum products, thus reducing the burden borne by the consumers.
While declining to support or oppose the removal of subsidy, Rewane however pointed out that with the current low price of crude oil, the burden on consumers by subsidy removal would be minimal.
Rewane, who was represented by Damilola Akinbami, also of the Financial Derivatives Company Limited, said subsidy removal would increase government’s revenue for the provision of other amenities to the people, adding that the multiplier effect is so huge that it will erode the burden on consumers arising from the removal.
According to him, Angola, Ghana and some other countries have reduced subsidy payment or eliminated it completely.
“Is subsidy sustainable? Does it benefit everyone? I will not say yes or no,” he added.
He said the aim of subsidy payment was to reduce the burden borne by the consumers in the purchase of petroleum products but argued that there is corruption in the payment of subsidy.
According to him, an outright removal of subsidy without addressing the fundamental problems of corruption and inadequate local refining capacity will not provide the solutions.
In his speech, the Director of Communications at the Nigeria Extractive Industry Transparency Initiatives (NEITI), Dr. Orji Ogbonnaya Orji, said the position of the agency has always been a total removal of subsidy because of the corruption in the scheme.
Director of International Press Centre (IPC), Mr. Lanre Arogundade, charged the media not to fold its arm until issues come up before setting agenda on such issues.
“The media wait for issues to come up before setting agenda on issues. This means that it is other factors set agenda for the media instead of the media setting the agenda. The media should also follow up on stories,” he added.
In his remarks, Akin Oyebode of IBTC called for production subsidy, stressing the current subsidy regime on fuel is a consumption subsidy.
The Dean of the School of Media and Communication at Pan-African University, Dr. Ike Obiaya, said in his opening remarks that the theme of the conference was one of utmost importance, given the present realities in the country.
*Ejiofor Alike – Thisday