Despite making zero provision for fuel subsidy in the 2012 budget, the Federal Government is yet to determine the take-off date for the deregulation of the pricing of petrol.
Briefing State House Correspondents after the Federal Executive Council (FEC) meeting Wednesday, Minister of Information, Mr. Labaran Maku, however, said the question of whether or not the subsidy would be removed was not contestable.
But rising from a meeting with President Goodluck Jonathan in Abuja on Tuesday night, the leadership of the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) said the government was not able to convince them that the policy would benefit the masses in any way.
Maku said subsidy has to be removed in order to save the economy, adding that the people were emotional about the positions which would further destroy what the country would want to build.
“No take-off date has been announced. The truth of the matter is that our country is in a very difficult economic situation. To continue to run Nigeria with one third of the budget set to subsidise one product is absolutely a path to a greater difficulty for the economy.
“We have continued to be talking about this because every sector we opened up has produced results. People who are emotionally talking about it are not actually addressing what we are saying. Let’s take the media, before now it was only NTA, until government deregulated broadcasting in the country. Before you could not set up a private radio station in this country or a television station, when a government deregulated, what do we have today? We have private television stations that are now competing with NTA and FRCN. If government decided to control broadcasting in the country, all of you would have been out of job.
“I know we all feel emotional about subsidy. If you look at the movement of economy all over the world, unless we don’t want to develop this country and move forward, in broadcasting we have seen results. So also is the case in cement production, banking, aviation, and telecommunication,” Maku said.
He also said FEC decided to return the Turn Around Maintenance (TAM) of the refineries in the country to the builders as against the former practice where it was given to middlemen.
He further stated that new refineries would be built in Lagos, Bayelsa and Kogi States with a combined capacity that would outstrip the local demand and afford export of products.
He also stated that the Ministry of Petroleum had revoked the gas pipeline supply contract to Alaoji power plant in Abia State and re-awarded it to Oilserv, an indigenous oil and gas company, for N3.8 billion with seven months completion period.
The company built the gas pipelines for Oando in Cross River State.
“In view of a memo from the Hon. Minister of Petroleum, council considered and ratified Mr. President's anticipatory approval for award of contract for the execution of the outstanding works for gas supply to Niger Delta Power Corporation (NDPC), Alaoji, in favour of Messrs Oilserv Limited in the sum of N2,582,787,557.23 only, plus $8,216,198.44, which is equivalent to N3,815,217,323.00 only, plus five per cent VAT of N190,760,866.10 only, with a completion period of seven months,” he explained.
Meanwhile, efforts by the Federal Government to get the umbrella bodies of the labour unions to agree to the withdrawal of fuel subsidy have failed as they have insisted that it should not be removed.
After a meeting with President Jonathan on Tuesday night, the leadership of the NLC and TUC said the government was not able to convince them that the policy would benefit the masses in any way.
In a statement signed by the Acting General Secretary of the NLC, Comrade Owei Lakemfa, and his TUC counterpart, Comrade John Kolawole, labour also accused the Co-ordinating Minister of the Economy and Minister of Finance, Mrs. Ngozi Okonjo-Iweala, of joggling some statistics to present a false conclusion.
“In its response, the labour movement noted that out of the projected N1.134 trillion to be saved from the subsidy removal, the local government allocation is N202.23 billion; states, N411.03 billion and the Federal Government N478.49 billion,” it said.
Labour, however, pointed out that if the Federal Government alone were to spend the entire N1.134 trillion, it could not execute even a fifth of the projects it had listed.
The projects which are to be executed under the Subsidy Reinvestment and Empowerment Programme (SURE) include the construction or completion of eight major roads and two bridges and provision of healthcare for three million pregnant women.
They also include six railway projects, youth employment, mass transit, 19 irrigation projects, rural and urban water supply, among other projects.
Labour, however, insisted that the presentation was not different from those presented by former regimes and administrations who did not keep their promises.
The mistrust of the government by the populace has been driven by its reneging on agreements, the most recent of which is the implementation of the minimum wage, labour said.
“Government has basic responsibilities to the populace and should not make externally driven prescriptions like the IMF did on SAP under the Babangida regime. Our opposition to fuel subsidy removal is driven by (our) belief that the people must come first on all policies," it said.
According to the statement, President Jonathan expressed surprise that the wage had not been paid, blaming it on bureaucracy.
He said he was not informed about any difficulties in paying the new wage.
He also urged labour to present its counter statistics and analysis of the government documents for discussions on a future date, which was accepted by the labour leaders.
“Also, Labour is of the firm opinion that given the high level of insecurity in the country, the hardship Nigerians are facing and the deepening poverty the removal of fuel subsidy will occasion will be injurious to the citizens and the country,” the statement said.
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