Again, NEITI seeks removal of fuel subsidy

22 December 2015, Abuja –  The Nigeria Extractive Industries Transparency Initiative (NEITI) has said that the federal government’s policy shift towards removal of fuel subsidy is a welcome development and a step in the right direction.

*Executive Secretary of NEITI, Dr. Orji Ogbonanya Orji.

*Executive Secretary of NEITI, Dr. Orji Ogbonanya Orji.

The Acting Executive Secretary of NEITI, Dr Orji Ogbonnaya Orji said that the proposal to remove fuel subsidy was consistent with the recommendations contained in NEITI’s independent audit reports conducted in the last six years, adding that the policy has served as a tool by the rich to exploit the poor.

Addressing a Policy Roundtable on Subsidy Removal Debate organised by the Shehu Yar’Adua Centre in Abuja recently, Orji said from NEITI’s independent audit report, over N4 trillion had been paid as subsidy to marketers from 2006-2012.

‘The breakdown of the subsidy shows that N2.197Billion was paid as subsidy in 2006. This rose to N236.64Billion in 2007 and N360.1Billion in 2008. In 2009 the country paid N198.1 billion as subsidy for petroleum products and in 2010 the subsidy payment rose to N416.45Billion. The payments skyrocketed to N1.9 trillion in 2011. Payments of oil subsidy declined to N690Billion in 2012 following the subsidy protests across the country in January of that year,” Orji explained.

Orji argued that Nigeria’s current challenges with the crash in the global oil price makes it more difficult to sustain the  subsidy arrangements which appears to fund the lifestyle of the rich, while majority of the citizens wallow in poverty.

Orji is of the view that removal of the subsidy will free over N700 billion  annually which can be channeled to provision of infrastructure like roads, education, health service, power, security, creation of jobs and basic benefits for the poor in the society.

He noted that oil subsidy was a financial assistance by the Federal Government to Nigerians to enable them buy refined products much lower than the prevailing market price, adding that it was also conceived as a temporary measure to provide relief and ensure products availability.

The Acting Executive Secretary of NEITI insisted that the management of the oil subsidy over the years has been trailed by allegations of fraud, corruption and arm twisting.

According to Dr Orji, NEITI aligns with the move by the government to remove subsidy and free Nigerians from this bondage once and for all, 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 policy before now have changed their position.

“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 center of the implementation, by creation of palliative programmes to reduce the pain temporarily that may be experienced by the poor and vulnerable in the short term. It is also part of NEITI‘s recommendations that the government should take steps to either make the refineries work, privatize them or create the enabling environment for private refineries to thrive,” he explained.

He underlined the need to ensure that the implementation of the proposal is gradual, slow but steady.

In her welcome remarks the Director General of the Shehu Musa Yar Adua Centre Jacqueline Farris explained that the policy dialogue was convened by the centre to seek the views of industry experts, development partners, the media and the civil society as well as the academia on the subsidy removal debates and the way forward.

Professor John Adeoti of the Nigeria Institute of Social and Economic research advised the government to implement the removal of the fuel subsidy side by side with the safety net programmes that could grant relief to the poor.



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