IT IS a fact that the masses of this
country have long been suffering
in all ramifications under different
administrations, especially on
transportation, foodstuffs, house
rents and clothing, among others.
Many families have found it difficult
to cope with the challenges
often brought by previous hikes in
fuel prices and it is expected that the
Nigerian leaders will understand
their plight and always strive to
find solution to it rather than adding
complications.
It is against this background that
majority of Nigerians kicked against
the recent proposal by the Senate
to introduce N5 charges on every
litre of petrol and diesel products
imported into the country and on
locally refined petroleum products
as revenues for the National Roads
Fund, the consequences of which
will lead to increase in the prices of
petroleum products, thus making
the economic recession bits harder
on the masses.
If the proposed plan by the Senate
had sailed through, a litre of petrol
which currently sells for N145 per
litre may be jerked up to between
N150 and N155 per litre.
However, following the widespread
condemnation that trailed
the plan to impose N5 charges
on petroleum products, the Senate
President, Dr. Bukola Saraki,
explained that contrary to wrong
interpretations in the media on a
recommendation by the Senate
Committee on Works, the proposed
National Road Fund Bill would not lead to any increase in the current
price of fuel.
He said: “The recommendations
came from the engagement with
stakeholders at the public hearing on
the bill. One of the conditions attached
to the new charges by all stakeholders
was that this N5 should not be an
increase, but come from what already
exists. It is believed that the existing
charges in the present price regime
would be reduced to accommodate
the N5 Road Fund Bill.
“Nigerians should be reassured that
although we have not even debated
these recommendations, the committee’s
report came with a clear proviso
that the N5 should come from a restructuring
of the existing template,
which is reshuffling the taxes in the
current N145 — so that N5 out of this
will always be pushed to develop existing
roads and build new ones”.
Senator Kabiru Gaya (APC Kano
South), who sponsored the National
Road Funds Bill hurriedly moved for
its withdrawal during plenary that follows
the widespread condemnation
to save it from total rejection by other
lawmakers.
Speaking in the same vein with the
Senate President, Senator Gaya in
his submission while presenting the
report of the Senate Committee on
Works on the proposed charges, argued
that the planed N5 levy on every
litre of petroleum products would not
in any way lead to increase in the price
of fuel as the charges will be deducted
from source within the existing petroleum
price template approved by the
Petroleum Products Pricing and Regulatory
Agency, PPPRA and being used
by importers/marketers.
He said: “There was media report
last week that we are increasing fuel
by N5. That is not true. We intend to
remove the N5 from the
current N145 per litre. If
this bill is passed, the government
will realise about
N94 billion per annum
into the National Road
Funds for road maintenance
across the country”.
But many of the Senators
were not convinced
with Gaya’s submission
by insisting that the proposal
would be injurious
to many Nigerians
economically and vehemently
kicked against the
bill being passed for third
reading by the Senate.
First to kick against it
was the chairman, Senate
Committee on Petroleum
(Downstream), Senator Kabiru Marafa
(APC Zamfara Central), who declared
that the proposal will further impoverished
Nigerians.
According to him, sourcing revenues
for road maintenance in the
country should be limited to road
sector itself and not extended to other
areas as the proposed N5 charges on
petroleum products would regardless
of the explanations given by Senator
Gaya lead to increase in the price
of fuel and invariably worsened the
hardship being faced by Nigerians.
He said: “My comments are on the
method of funding. The claims that the
N5 charge has already been captured
are not correct. Taking another N5
from refined products will add to the
suffering of the people. This will bring
untold hardship to the people of Nigeria.
We have already addressed something
like this in the Petroleum Industry
Governance Bill. I oppose this recommendation
very vehemently”.
A submission also supported by
the Senate Minority Leader, Senator
Godswill Akpabio (PDP Akwa Ibom
North-West), who said he had great
reservations on the proposals and
urged the Senate to be very cautious in
handling the bill.
“I want to align myself with the submissions
of other speakers. I have reservations
about the bill. I do not want
the chamber to just pass a law and it
will not be effective. I had an experience
with the Police Funds when I was
a governor. Throughout my time as
governor, I did not get any fund”, he
said.
Consequently in line with the request
of the sponsor of the bill, Senator
Gaya for its withdrawal, the Deputy
Senate President, Ike Ekweremadu
who presided over the session, put the
question to a voice vote and almost all
the lawmakers yelled ‘ayes’, including
members of the Committee on Works
who signed the initial report, which
recommended that the price of fuel be
increased by N5.
However before the Senate stood
down consideration of the bill, the
Deputy Senate Leader, Bala Ibn
Na’Allah (APC Kebbi South), stressed
that as explained by Gaya, the Senate
never planned for price increase on
fuel as widely reported in the media.
His words: “We need to suspend
our procedure and explain to Nigerians.
If we do not do this, there will
be trouble. Nigeria will think that we
want to increase fuel price.
“Senate has no intention of increasing
the price of fuel. There is no ambiguity
about it. What we are trying to
do is to find other sources of funding
road infrastructure. We do not want
to impose hardship on the people of
Nigeria. We want to ensure that those
who voted for us have comforts in
their lives”.
In 2012 when the federal government
increased the pump price of
premium motor spirit, PMS otherwise
known as petrol from N65 per litre
to N140, claiming that it was paying
heavy subsidy on the product, which
prices were high, the Senate under the
leadership of Senator David Mark set
up a commission of enquiry that later
exposed massive corruption in the
subsidy regime. The former President
Goodluck Jonathan-led administration
was then forced to reduce the
price to N97 per litre.
The federal government’s action of
increasing the price, which followed
advice from the international monetary
fund, IMF, was also justified
on the basis of massive corruption
that was discovered in the petroleum
downstream sector in the same year.
But despite the continued suffering of
the masses as a result of the fuel pump
price increase, no person has been arrested
and prosecuted for subsidy corruption.
However, many Nigerians voted
for President Muhammadu Buhari in
the 2015 general election based on his
stance on corruption and promise to
wage serious war against the fraud in
the petroleum downstream sector as
well as the vow not to increase the petrol
pump price.
President Buhari was initially reluctant
to increase the petrol price from
N86 to N145 per litre in May last year
despite the hard biting scarcity of the
product that left Nigerians queuing at
petrol filling stations for days to get it,
but had to concede to the price increase
only after so much pressure. The president,
according sources succumbed to
pressure when the scarcity persisted
mainly because marketers called
for an upward review of the pump
prices and refused to import the
product saying it was not profitable
to import and sell at N86.
Based on Buhari’s earlier promise
not to increase the fuel price and the
masses’ sufferings, the Minister of
State for Petroleum, Ibe Kachikwu
had reportedly threatened to resign
if the president did not agree to the
increase then. “I’m not sure the president
will approve any such increase
anymore, especially with the current
economic situation,” he said in reference
to Nigeria’s current economic
recession that has seen tens of thousands
of people lose their jobs, companies
shut down, and states unable
to pay salaries.
After a closed door meeting with
the President on the heat of fuel crisis,
Kachikwu, said the government
has no plans to increase the price of
petrol despite the statement credited
to former Group Managing Directors,
GMDs of the Nigerian National
Petroleum Corporation, NNPC, advising
the government to increase
the price.
According to the former NNPC
chiefs, the current price cap of N145
per litre of petrol was “not congruent
with the liberalization policy.”
The removal of the cap under a liberalised
market environment would
allow marketers of petroleum products
to sell at a comfortable price
based on factors such as the exchange
rate and international crude
price. With the Naira exchange rate
going down by over 50 per cent to
about N412 since the current petrol
price was fixed, approving the recommendation
would have meant
Nigerians pay more for petrol.
Kachikwu, who is also a former
GMD of NNPC, indicated the government
would not heed his predecessor’s
advice. The incumbent,
Maikanti Baru, also said the government
had no plans to increase the
price. “Have you seen any memo
to that effect? There is nothing, like
that”, Baru said.
Speaking in the same vein then,
the acting Executive Secretary of Petroleum
Product Pricing and Regulatory
Agency, PPPRA , Sotonye
Iyoyo also rejected the advice to
increase fuel price. He said the proposal
was the personal opinion of
the former state oil chiefs.
“If it was a recommendation, that
is what it is – a personal opinion. I’m
not aware government is planning
any fuel price increase. We are in a
liberalised market already”, Iyoyo,
said.


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