18 december 2015, Abuja – he Nigeria Extractive Industries Transparency Initiative on Thursday said the possible policy shift by the Federal Government with respect to the removal of subsidy on petrol was a welcome development and a step in the right direction.
The Acting Executive Secretary, NEITI, Dr. Ogbonnaya Orji, said the proposal to remove fuel subsidy was consistent with the recommendations contained in the agency’s independent audit reports conducted in the last six years, adding that the subsidy regime had served as a tool by the rich to exploit the poor.
In a statement from the agency on Thursday, Orji was quoted as saying, “From NEITI’s independent audit reports, over N4tn has been paid as subsidy to marketers from 2006-2012. The breakdown of the subsidy shows that N2.197bn was paid as subsidy in 2006. This rose to N236.64bn in 2007 and N360.1bn in 2008.
“In 2009, the country paid N198.1bn as subsidy for petroleum products and in 2010 the subsidy payment rose to N416.45bn. The payments skyrocketed to N1.9tn in 2011. Payments of oil subsidy declined to N690bn in 2012 following the subsidy protests across the country in January of that year.”
Orji argued that Nigeria’s current challenges with the crash in global oil prices had made it more difficult to sustain the subsidy arrangement, which appeared to fund the lifestyle of the rich, while majority of the citizens wallow in poverty.
According to him, the removal of the subsidy will free over N700bn annually, as he stated that the savings could be channelled into the provision of infrastructure like roads, education, health care, power, security and job creation to benefit the poor across the country.
The acting executive secretary regretted that the management of oil subsidy over the years had been trailed by allegations of fraud, corruption and arm-twisting.
He stated that NEITI aligned with the move by the government to remove subsidy, describing the decision, if allowed to stay, as a courageous one.
He expressed delight that many of the individuals and groups that were opposed to the removal of subsidy before now had changed their position.
Orji said, “In removing the subsidy, it is the position of NEITI that the government considers progressive measures to put the welfare of the ordinary citizen at the centre of the implementation by the creation of palliative programmes to reduce the pain temporarily that may be experienced by the poor and vulnerable in the short term.