Nigeria: Subsidy - Governors Accuse NNPC of Fraud, Secrecy

27 January 2022

At a meeting with the NLC, the governors said until the truth about the plans on NNPC is made known, many people would be uncomfortable with the subsidy removal.

On the heels of plans by the federal government to remove subsidy on fuel, the Nigerian Governors' Forum (NGF) has accused the Nigerian National Petroleum Corporation Limited (NNPC) of fraud and unclear intentions.

The governors said with the NNPC limited, there are raging questions of accountability with regards to subsidy and that until the truth about their plans is made known, many people would be uncomfortable with the subsidy removal.

They said this at a meeting with the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC), on Wednesday, in Abuja.

The meeting was held to deliberate on the fuel subsidy removal, which both groups believe is a necessary action that the country must deal with now or in the nearest future.

It comes about three days after the federal government decided to suspend plans to remove subsidy on fuel.

The Minister of Finance, Zainab Ahmed, had said removing fuel subsidy will worsen the situation and impose more difficulties on Nigerians and President Muhammadu Buhari.

She also said the federal government is exploring ways of reaching an agreement with civic groups and the labour union to ensure the eventual removal of subsidy will have minimal impact on Nigerians.

Plans by the federal government to fully deregulate fuel price by removing subsidy has lingered for a while.

The National Economic Council (NEC) had in November 2021 recommended that the government increase the price of petrol to N302 per litre in February 2022.

Petrol price is currently between N162 and N165 per litre.

While some Nigerians say the policy will help lower the cost of living and support millions who live below the poverty line, others including the labour union believe subsidies constitute an unsustainable drain on public resources needed for critical developmental projects.

Administrators with shady plans

At Wednesday's meeting, both the NGF and NLC agreed that the lacuna in the subsidy removal agenda was hidden in the untruths bandied by the administrators of the subsidy, particularly NNPC, which they identified to be at the forefront of the mismanagement of the proceeds accrued therein.

The Chairman Forum and Governor of Ekiti State, Kayode Fayemi, said it has become necessary for the two groups to carefully verify all of NNPC's estimates to ensure that whatever action is taken on subsidy, would make the people direct beneficiaries and not a few wealthy individuals and their cronies in the country.

There are raging questions of accountability associated with subsidy removal in the country, he said, while he noted that the NGF and the NLC can work together to proffer solutions that heal the economy and provide succour to the Nigerian people.

While he argued that the pump price of surrounding countries like Niger, Mali, Cameroun and Ghana is equivalent to a US dollar, Mr Fayemi said Nigeria, though with a pump price that is less than a dollar, is uncomfortable with the removal of subsidy until the challenge of what the NNPC is telling the country is confronted frontally.

He, therefore, stressed the need for a partnership with the NLC to confront the challenges of what the NNPC is about.

"... Because there is a lot of fraud in the consumption and distribution figures that the country is getting and we can only move forward if the NLC engages all those who are knowledgeable in the field like PENGASSAN to conduct a thorough research into the sector before any further action is taken on subsidy.

"Only about eight states are benefitting directly from the subsidy while all the others have to contend with the situation on their own.

The partnership with the NLC must confront the perennial issue of palliatives for the common man towards cushioning the effects of subsidy removal on the citizenry stating that not tackling the problem now is tantamount to postponing the evil day.

"Finding succour for the ordinary Nigerian at this time is absolutely imperative and necessary now more than ever," Mr Fayemi said.

Other options

One other major agenda of the meeting was to also plead with Labour Union to jettison their decision to embark on what they referred to as a mega-strike and collaborate with the governors to consider the dimensions at play on the subsidy removal palaver.

In his contribution, the Edo State Governor, Godwin Obaseki, warned that Nigeria has a choice of continuing to spend or take concrete actions on a permanent problem - rather than throwing away N3 trillion on subsidy.

He suggested that the nation can, in the interim, increase productivity to reduce imports and create jobs.

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He also emphasised that the country would do well to revamp the power sector, which is virtually comatose because, without power, millions are thrown into unemployment, and ultimately, poverty.

And the Plateau State Governor, Simon Lalong, said Nigerian cannot continue with subsidising petroleum products.

"We must find options and create opportunities that address the hardships that stare our people in the face.

"The painstaking work that led to the solutions that the NGF was highlighting took a year to script together. The fact that we are sitting here with Labour to resolve this contending issue does not mean that as we leave the table we should go to sleep.

"Instead, the teams from the two groups should immediately set out to work to find the light at the end of the tunnel," he said.

This meeting was held barely an hour before the NLC announced the suspension of its mega-strike, as they told the governors that their committee had consulted widely and decided to call it off before arriving at the NGF secretariat.

Both the NLC chairman, Ayuba Wabba, and the TUC president, Quadri Olaleye, stressed their lack of appreciation of the trust deficit that characterised previous negotiations and wondered why the subsidy issue had always been shrouded in lack of transparency on the part of the government.

They also argued that the conflicting figures that always came from the managers of the petroleum sector always tend towards inefficiency, which has remained, to the people and to Labour, completely objectionable.

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