(FRANKS..)
By ISAAC ANUMIHE
Since the beginning of March, the nation has grappled with shortage of fuel which invariably resulted in long queues at the filling stations and loss of production hours in wait to buy the product.
However, the end doesn’t seem to be in sight following accusations and counter-accusations between the oil marketers and the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala over payment of subsidy claims.
The marketers had alleged that the Federal Government owed them a balance of N200 billion as against government’s N98 billion claim.
Government said that it had paid N500b to petroleum marketers with a balance of N98bn to complete the payment.
The latest payment of N156b, the government said was made in April.
The payment, according to Okonjo-Iweala, has two components.
The first consists of the cash-backing of the N100b IOU which the marketers were given in March. The second is N56b in interest payments.
The minister urged the marketers to appreciate the efforts of the government to meet up with their payments and reciprocate with some understanding of the situation of Nigerians who should not suffer more. She urged the marketers to sustain the distribution and supply of fuel to end the suffering of Nigerians at fuel stations.
“The government has made maximum effort, in spite of the well-known fact that the fall in oil price has significantly reduced national revenues and prioritized payments to marketers. For the sake of Nigerians who are bearing the brunt of fuel scarcity, the marketers should reciprocate in the spirit of dialogue and cooperation in which we have always tried to engage them.
“The N156b is the latest in a series of significant payments made to the oil marketers within the last five months. These include over N300b in two instalments in December last year and N31b in interest differentials recently. In all, oil marketers have received over N500b within the past five months,” she said. Okonjo-Iweala also noted that the government had to prioritize payment to marketers in spite of revenue constraints.
However, after collecting the N156b from the government, the marketers still requested the federal government to pay the balance, a way of holding the federal government at the jugular.
This attitude has since triggered some unsavoury comments from Nigerians. While some said that the cabals that constitute the oil marketers should be checked, others blamed the government for the failure of having a functional refinery in Nigeria.
Advocates of subsidy removal
An economist, Mr. Odili Enwegbara said that the cabal built refineries in neighbouring countries, stole the nation’s wealth, refine it and bring back to Nigeria and still demand subsidy.
“This racket has been taken to the power sector where generators and diesel sellers bought power plants at giveaway rates and are now sabotaging the industry,” he said.
The hardship caused by the activities of the cabal in the oil industry has led to a groundswell of calls for the removal of oil subsidy.
Timothy Odah, Chairman, Commissioners Forum
“In terms of the oil subsidy, I’m one of those that support total removal of subsidy or about 95 per cent removal with condition. In removing it, the government must ensure that it embarks on commensurate development that will reduce cost on the people in accessing the means of livelihood. If it is removed where is it going to? If there is further removal on the subsidy is government going to invest so much in power in order to improve power supply to the extent that it will be up to 99 per cent? In that way it will be used in the villages, the rural areas whereby it will encourage cottage industry development, lead to self employment, grow small scale industries into medium scale where one person will be employing, two or three persons. But today, there is a collapse. As you heard me say, if Nigeria is going to be developed to the extent that you have 99.9 per cent power supply and there is water and there is good road network I advocate a total removal of oil subsidy. The type of education we have today, where you have too many degree holders in philosophy, in religious studies and so on and so forth, to what extent will it help in the improvement of the economy except in growing more churches,” he asked.
Also, members of the Federation Accounts Allocation Committee (FAAC), which represents the opinion of the state governors has moved for the removal of oil subsidy. On Tuesday, April 15, 2014, FAAC ratified its committee’s decision to remove the petroleum subsidy.
FAAC had in March of the same year set up a committee to look into the possible removal of fuel subsidy. The committee comprised a member from the commissioners’ forum, the customs, state accountants general and the minister of state for finance etc.
On the submission of the report, FAAC simply approved the removal.
According to the chairman of Commissioners Forum, Odah, the approval would be sent to the president for ratification.
He said that fuel subsidy has not solved the problem for which it was introduced, adding that only a few privileged individuals benefit from it to the detriment of the majority of Nigerians.
Foot dragging
But the removal is subject to the ratification of President Goodluck Jonathan.
However, the document has been with the president for over a year. It is certain that the president wants to leave the decision for the incoming government to take having burnt his fingers when he attempted the removal in January 2012.
Now that the governors are clamouring for the removal, it is high time the authorities removed the subsidy.
This brings to the fore the failure of government in reviving the refineries. The government attempted to privatize the refineries but the same cabal in the petroleum industry stoutly fought against it. This is one of the hurdles the Buhari government will tackle on assumption of office.
Effect on investors
The call even enjoys the support of investors in the sector who feel if the oil and gas downstream is fully deregulated, they will have better business, employ more hands and be more prudent in the management of their resources.
For instance, the chief executive of the Capital Oil, Oil Force and First Independent, Dr. Ifeanyi Uba recently told Abuja Metro that about 700 workers he has in the three outfits had their jobs threatened if the subsidy on petroleum is not totally removed. He said over 400 petroleum haulage trucks he bought in anticipation of deregulation are roting away with income loss of over N350m everyday. The trucks are parked and idle at his tanker garage at Amuwo Odofin in Lagos.
He argued that if the total privatization is actualised, the better competition that would encourage either more oil import or refining within Nigeria will keep his facilities and many others belonging to other investors busy and the economy better.
Uba also revealed that several thug boats, mother vessels and other port vessels the companies procured to keep busy at deregulation are wasting at the Ibafo Jetty in Lagos where his oil business is located. He and many other investors in the sector are strong advocates of deregulation if their businesses would remain alive.
On Monday, Uba spoke to Abuja Metro and called on President Goodluck Jonathan not to bequeath the regulated fuel price regime to Gen. Muhammadu Biuhari.
That was in reaction to his move on Sunday that breached the nationwide oil workers’ strike after his loading facility in Ibafo, Lagos commenced the pumping of petroleum.
He also expressed happiness and satisfaction that his bold “intervention to save Nigerians from further crises is what gave rise to the suspension of the strike later yesterday by the oil workers.
“I felt I would be acting irresponsibly to watch Nigerians dying in hospitals, languishing in filling stations without buying the product and keep quiet. So I had an obligation as a Nigerian not to allow that continue, and I bet you that if I did not make that move, the strike would have been on today.”
Uba lamented that a situation where hospitals shut down, telecoms threatened to stop operations and power supply crippled should not be tolerated by anyone that means well for the nation.
”You can understand the extent and enormity of the crises when even banks threaten to close shop because they don’t have fuel to power their generators since the public power system has also crumbled. So I felt it a duty as one that operates the largest fuel supply base in Nigeria to turn around the situation.
“By today, I am sure we have already achieved the 13m litres or 400 truck-loads target and we have product in the jetty and will not stop pumping. I am assuring Nigerians that what we did on Sunday was not a flash in the pan but real action and resolve to make sure the scarcity is defeated. In a few days, it would be over. That is why we call on the president to declare total deregulation even a day to his exit.”
While advocating for total deregulation of the oil sector and removal of fuel subsidy which he argued does not favour or benefit the common man, he said Nigerians would be surprised that deregulation would rather force down the price of petroleum per litre and assuredly create more job opportunities and bring an end to fuel scarcity finally.
He urged President Jonathan that it would be a great act of patriotism for him to declare total deregulation of petroleum pricing.
The Capital oil boss advised Nigerian not to entertain fears about deregulation and oil pricing. “I envisage a situation where oil would sell at about N85 for a litre when deregulated because that will encourage competition among operators and also create the incentive for local refining. When that is achieved, more jobs will come and the entire economy would be more robust and gain from the development.”
By ISAAC ANUMIHE
Since the beginning of March, the nation has grappled with shortage of fuel which invariably resulted in long queues at the filling stations and loss of production hours in wait to buy the product.
However, the end doesn’t seem to be in sight following accusations and counter-accusations between the oil marketers and the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala over payment of subsidy claims.
The marketers had alleged that the Federal Government owed them a balance of N200 billion as against government’s N98 billion claim.
Government said that it had paid N500b to petroleum marketers with a balance of N98bn to complete the payment.
The latest payment of N156b, the government said was made in April.
The payment, according to Okonjo-Iweala, has two components.
The first consists of the cash-backing of the N100b IOU which the marketers were given in March. The second is N56b in interest payments.
The minister urged the marketers to appreciate the efforts of the government to meet up with their payments and reciprocate with some understanding of the situation of Nigerians who should not suffer more. She urged the marketers to sustain the distribution and supply of fuel to end the suffering of Nigerians at fuel stations.
“The government has made maximum effort, in spite of the well-known fact that the fall in oil price has significantly reduced national revenues and prioritized payments to marketers. For the sake of Nigerians who are bearing the brunt of fuel scarcity, the marketers should reciprocate in the spirit of dialogue and cooperation in which we have always tried to engage them.
“The N156b is the latest in a series of significant payments made to the oil marketers within the last five months. These include over N300b in two instalments in December last year and N31b in interest differentials recently. In all, oil marketers have received over N500b within the past five months,” she said. Okonjo-Iweala also noted that the government had to prioritize payment to marketers in spite of revenue constraints.
However, after collecting the N156b from the government, the marketers still requested the federal government to pay the balance, a way of holding the federal government at the jugular.
This attitude has since triggered some unsavoury comments from Nigerians. While some said that the cabals that constitute the oil marketers should be checked, others blamed the government for the failure of having a functional refinery in Nigeria.
Advocates of subsidy removal
An economist, Mr. Odili Enwegbara said that the cabal built refineries in neighbouring countries, stole the nation’s wealth, refine it and bring back to Nigeria and still demand subsidy.
“This racket has been taken to the power sector where generators and diesel sellers bought power plants at giveaway rates and are now sabotaging the industry,” he said.
The hardship caused by the activities of the cabal in the oil industry has led to a groundswell of calls for the removal of oil subsidy.
Timothy Odah, Chairman, Commissioners Forum
“In terms of the oil subsidy, I’m one of those that support total removal of subsidy or about 95 per cent removal with condition. In removing it, the government must ensure that it embarks on commensurate development that will reduce cost on the people in accessing the means of livelihood. If it is removed where is it going to? If there is further removal on the subsidy is government going to invest so much in power in order to improve power supply to the extent that it will be up to 99 per cent? In that way it will be used in the villages, the rural areas whereby it will encourage cottage industry development, lead to self employment, grow small scale industries into medium scale where one person will be employing, two or three persons. But today, there is a collapse. As you heard me say, if Nigeria is going to be developed to the extent that you have 99.9 per cent power supply and there is water and there is good road network I advocate a total removal of oil subsidy. The type of education we have today, where you have too many degree holders in philosophy, in religious studies and so on and so forth, to what extent will it help in the improvement of the economy except in growing more churches,” he asked.
Also, members of the Federation Accounts Allocation Committee (FAAC), which represents the opinion of the state governors has moved for the removal of oil subsidy. On Tuesday, April 15, 2014, FAAC ratified its committee’s decision to remove the petroleum subsidy.
FAAC had in March of the same year set up a committee to look into the possible removal of fuel subsidy. The committee comprised a member from the commissioners’ forum, the customs, state accountants general and the minister of state for finance etc.
On the submission of the report, FAAC simply approved the removal.
According to the chairman of Commissioners Forum, Odah, the approval would be sent to the president for ratification.
He said that fuel subsidy has not solved the problem for which it was introduced, adding that only a few privileged individuals benefit from it to the detriment of the majority of Nigerians.
Foot dragging
But the removal is subject to the ratification of President Goodluck Jonathan.
However, the document has been with the president for over a year. It is certain that the president wants to leave the decision for the incoming government to take having burnt his fingers when he attempted the removal in January 2012.
Now that the governors are clamouring for the removal, it is high time the authorities removed the subsidy.
This brings to the fore the failure of government in reviving the refineries. The government attempted to privatize the refineries but the same cabal in the petroleum industry stoutly fought against it. This is one of the hurdles the Buhari government will tackle on assumption of office.
Effect on investors
The call even enjoys the support of investors in the sector who feel if the oil and gas downstream is fully deregulated, they will have better business, employ more hands and be more prudent in the management of their resources.
For instance, the chief executive of the Capital Oil, Oil Force and First Independent, Dr. Ifeanyi Uba recently told Abuja Metro that about 700 workers he has in the three outfits had their jobs threatened if the subsidy on petroleum is not totally removed. He said over 400 petroleum haulage trucks he bought in anticipation of deregulation are roting away with income loss of over N350m everyday. The trucks are parked and idle at his tanker garage at Amuwo Odofin in Lagos.
He argued that if the total privatization is actualised, the better competition that would encourage either more oil import or refining within Nigeria will keep his facilities and many others belonging to other investors busy and the economy better.
Uba also revealed that several thug boats, mother vessels and other port vessels the companies procured to keep busy at deregulation are wasting at the Ibafo Jetty in Lagos where his oil business is located. He and many other investors in the sector are strong advocates of deregulation if their businesses would remain alive.
On Monday, Uba spoke to Abuja Metro and called on President Goodluck Jonathan not to bequeath the regulated fuel price regime to Gen. Muhammadu Biuhari.
That was in reaction to his move on Sunday that breached the nationwide oil workers’ strike after his loading facility in Ibafo, Lagos commenced the pumping of petroleum.
He also expressed happiness and satisfaction that his bold “intervention to save Nigerians from further crises is what gave rise to the suspension of the strike later yesterday by the oil workers.
“I felt I would be acting irresponsibly to watch Nigerians dying in hospitals, languishing in filling stations without buying the product and keep quiet. So I had an obligation as a Nigerian not to allow that continue, and I bet you that if I did not make that move, the strike would have been on today.”
Uba lamented that a situation where hospitals shut down, telecoms threatened to stop operations and power supply crippled should not be tolerated by anyone that means well for the nation.
”You can understand the extent and enormity of the crises when even banks threaten to close shop because they don’t have fuel to power their generators since the public power system has also crumbled. So I felt it a duty as one that operates the largest fuel supply base in Nigeria to turn around the situation.
“By today, I am sure we have already achieved the 13m litres or 400 truck-loads target and we have product in the jetty and will not stop pumping. I am assuring Nigerians that what we did on Sunday was not a flash in the pan but real action and resolve to make sure the scarcity is defeated. In a few days, it would be over. That is why we call on the president to declare total deregulation even a day to his exit.”
While advocating for total deregulation of the oil sector and removal of fuel subsidy which he argued does not favour or benefit the common man, he said Nigerians would be surprised that deregulation would rather force down the price of petroleum per litre and assuredly create more job opportunities and bring an end to fuel scarcity finally.
He urged President Jonathan that it would be a great act of patriotism for him to declare total deregulation of petroleum pricing.
The Capital oil boss advised Nigerian not to entertain fears about deregulation and oil pricing. “I envisage a situation where oil would sell at about N85 for a litre when deregulated because that will encourage competition among operators and also create the incentive for local refining. When that is achieved, more jobs will come and the entire economy would be more robust and gain from the development.”