Tinubu government under pressure to scrap further ‘disappeared’ fuel subsidies

• Rejects N5.4 trillion provision for 2024 payment
• PDP asks president to review ‘flawed economic policies’
• Atiku calls on N’Assembly to investigate alleged secret payments
• Landing cost data confirms FG’s claims, experts say

The ghost of Nigeria’s controversial fuel subsidies seems unwilling to rest in peace, even after President Bola Ahmed Tinubu on May 29, 2023, allegedly buried his multi-trillion naira gobbling plan.

Many Nigerians were spooked yesterday when a leaked strategy document from inside the Presidency, which went through a “multiple process involving multiple drafts and discussions before any document was finalized”, suggested that N5.4 trillion was earmarked for the 2024 dead grant.

No wonder the opposition Peoples Democratic Party (PDP) accused President Tinubu of admitting the truth, affirming that the revelation showed “the callousness of the All Progressives Congress (APC) in forcing Nigerians to buy fuel at the very exorbitant price of over N800 per liter in different parts of the country.

Additionally, former Vice President Atiku Abubakar urged the National Assembly to investigate the alleged secret payment of fuel subsidy. In a statement by his media adviser, Paul Ibe, Atiku urged the Tinubu administration to show courage by taking ownership of its policies and their consequences by being accountable to Nigerians.

He accused the administration of “diverting public funds through gasoline subsidies, hence the government’s refusal to disclose how much is spent on subsidies.”

Atiku added that the alleged hidden subsidy program was one of the factors deterring investment in the oil sector. However, the presidency denied media reports suggesting that the federal government had created a reserve of $5.4 trillion.

Claiming that the era of subsidies is over, the Presidency also warned mainstream media platforms and social media platforms to desist from further dissemination of fiscal policy documents that have not yet been ratified by the government.

This was contained in a statement by the Special Adviser to the President on Information and Strategy, Bayo Onanuga. He said the Presidency’s attention was drawn to two circulating fiscal policy documents that had received extensive media coverage.

He lamented that one of the documents, titled “Regulation on Inflation Control and Price Stability (Fiscal Policy Measure, etc.) 2024”, was released as if it was an executive order signed by President Bola Ahmed Tinubu.

“The second is a 65-page draft document titled ‘Accelerated Stabilization and Development Plan (ASAP)’ which contains suggestions for improving the Nigerian economy. President Tinubu received a copy of the bill on Tuesday,” he said.

Onanuga urged the public and media to disregard both documents and refrain from further discussion on them, stressing that neither of them is an official document endorsed by the Federal Government of Nigeria.

He described them as policy proposals that were still subject to review at the highest level of government, pointing out that one of them even clearly had “draft” written on it.

He said: “It is important to understand that policymaking is an iterative process involving many projects and discussions before any document is finalized. We assure the public that an official position on the documents will be made available once comprehensive reviews and approvals are completed.

“Both documents contain reports questioning the government’s policy on customs tariffs, fuel subsidies and other economic issues. The government would like to emphasize once again that its position on fuel subsidies has not changed in relation to the declaration of President Bola Ahmed Tinubu of May 29, 2023. The fuel subsidy system has expired. In 2024, the amount of USD 5.4 trillion has not been allocated for this purpose, as is widely speculated and discussed.

The Special Adviser said the Coordinating Minister for the Economy further explained: “As previously stated by government officials, including myself, President Tinubu announced the end of the fuel subsidy program last year and this policy remains unchanged. The Federal Government is making every effort to mitigate the impact of this expulsion and alleviate cost of living pressures on Nigerians.

“Our strategy focuses on addressing key factors such as food price inflation, which is significantly influenced by transport costs. With the implementation of our CNG initiative, which aims to replace the high costs of PMS and AGO, we expect to further reduce these costs. Our commitment to ending unproductive subsidies is unwavering, as is our commitment to supporting our most vulnerable groups. “

Onanuga urged the media to always conduct necessary checks and maintain restrictions on the use of documents that do not come from official channels so that citizens are properly informed, guided and educated on government policies and programs.

In a statement by its National Publicity Secretary, Debo Ologunagba, the PDP said: “This revelation, after series of denials by APC leaders and government officials, confirms the axiom that no matter how long lies seem to flourish, truth as the sun will always prevail.”

The opposition party asked whether it is not a provocation and an act of extreme insensitivity that while the nation is suffering from severe infrastructural decay and millions of Nigerians are experiencing hardship, poverty, misery and despondency as a result of the removal of subsidies, “astonishing According to reports, corrupt APC leaders are besetting 5 .4 trillion dollars in the name of fuel subsidies?”

The PDP said: “Nigerians deserve to know where the N5.4 trillion comes from. Which government agency is responsible for the payment of the said fuel subsidy and to whom? What is the payment criterion? How much fuel is subsidized and at what cost? Why is petrol still selling at a breakneck pace despite the disclosure of continued fuel subsidy payments?”

The party has urged President Tinubu to immediately overhaul his economic team to get competent hands and curb corruption prevalent in his administration.
“Mr. President must also review the administration’s economic policies that are strangling people. Recognizing, accepting and reviewing flawed economic policies is not weakness, but courage,” he said.

Asking the President to act quickly, the party warned: “There is hunger and misery in the land. Better imagine the reaction of hungry people!”
ALSO, Atiku’s statement reads in part: “The secret subsidy system was one of the reasons why investments in the oil sector refused to materialize. Tinubu brought the questionable nature of Lagos governance to the federal level. He claims the subsidies have disappeared, but his special adviser on energy, Olu Verheijen, says they intervene from time to time, while his finance minister, Wale Edun, described the removal of subsidies as an “ongoing process”. The document prepared by the Coordinating Minister of Economy revealing the amount of the subsidy paid is currently denied by the authors of the document themselves.

“Both the World Bank and the IMF have disclosed in separate reports that Nigeria continues to pay petrol subsidies but the Tinubu government is unwilling to come forward. Even a senior member of the APC disclosed that the grant had been disbursed.

“For a man who claims to be on a mission to attract foreign direct investment, it is ironic that he cannot see that the blunders and lies associated with his policies have the power to discourage investors. He must tell the truth about subsidies because he also serves as oil minister. The Tinubu administration should be brave enough to come clean about its policies and performance, and responsible enough to answer to Nigerians for its actions.”

He added: “The National Assembly should get to the heart of the matter instead of focusing on trivial issues. The National Assembly must actively fulfill its responsibilities, especially in the area of ​​oversight. Posterity will not be kind to members of the National Assembly if they continue to look the other way while daylight robbery occurs.”

Meanwhile, landing cost figures presented by industry experts challenge the federal government’s denial, saying Nigeria is now paying more for fuel subsidies before President Tinubu announced the suspension of the program.

Figures show that the landed cost of Premium Motor Spirit (PMS), also known as petrol, has increased by 46.8% to an average of N1,026.71 per liter in May 2024 from N545.83 per liter recorded in the corresponding period of 2024 2023, when Tinubu declared that the subsidies had “disappeared”.

The landing cost does not include other additional costs which include deportation charges, transportation logistics and marketers’ margin, which would collectively put supplies at petrol stations at almost N1,100/litre compared to N529 in July.

“What is surprising, however, is that the government is not honest about actual demand, which I estimate is no more than 35 million liters per day,” said Kelvin Emmanuel, economist and CEO of Dairy Hills.

He explained: “The whole point of the PMS subsidy is mainly to depreciate the naira. The first step for the government is to hand over NNPCL to an asset management company that will audit, dismantle, redesign and send it to markets for business transformation.”

Another expert, Samuel Sule, CEO of Renaissance Capital Africa, said: “Do the people of Nigeria pay for the market price of petrol? If you look at the prices of our gasoline and the exchange rate on NAFEM, you will realize that there is a disconnect. Why don’t we pay the market price, it is more political because where does the income come from?”

Marketer groups such as the Independent Petroleum Marketers Association of Nigeria and the Nigeria Petroleum Compositions and Products Marketers Association declined to comment on the matter.