Saraki and Ekweremadu
Saraki and Ekweremadu

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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