By Adewole Kehinde
On November 23, the Group Managing Director/Chief Executive Officer of NNPC Limited Mallam Mele Kyari projected that petrol would sell for between N320 and N340 per litre from February 2022.
He stressed that Nigeria would be out of the subsidy regime in the first quarter of 2022.
Mallam Kyari explained that the subsidy would have been eliminated this year, but for certain factors that prevented it.
On Sunday morning, “NNPC’s Monthly Deductions from FAAC Hit N200bn in December” was the major headline of ThisDay Newspaper and this really gave me major concerns on the wastage called Fuel Subsidy.
The paper reported that the Nigerian National Petroleum Company (NNPC) Limited will again make a deduction of roughly N200 billion from the joint Federal, State and Local Government Account when the Federation Account Allocation Committee (FAAC) meets later this month to share the statutory monthly allocation.
The N200 billion will be the highest amount deducted by the NNPC since it resumed payment of petroleum subsidies in February this year.
In all, it further showed that the NNPC has netted off at least N1.027 trillion from monies accruing to the three tiers of government in the country between February and October as payment for the controversial petrol under-recovery.
A breakdown of the various deductions indicated that payments have increased progressively, growing from N24.3 billion in February to N60.3 billion in March and N61.9 billion in April this year.
Furthermore, in May, the NNPC removed N126 billion as a subsidy, while June came next with N164.3 billion. August had the year’s lion’s share of N173.1 billion.
However, this will be overtaken by the N200 billion planned deduction later this month, while September’s deduction stood at N149.28 billion and the October figure was N163.709 billion.
Besides, the NNPC stated that product losses amounted to N143.3 billion, stressing that the “value shortfall” of nearly N200 billion would be subtracted later this month when the FAAC meeting is held.
Nigeria as a country cannot afford to be spending a whopping N1.027 as payment for the petrol under-recovery every year if we really want to be developed as a Nation.
Nigeria spends N200 billion on Premium Motor Spirit subsidies monthly.
Infant mortality in Nigeria remains unacceptably high at 90.4 per 1,000 live births, so therefore the money spent on subsidy could build 20, 000 primary health care centres at the cost of N10 million each.
This money would also solve a key concern of equipping Nigeria’s health system as the country keeps posting depressing results on maternal and child mortality rates.
There is no doubt that since the President signed the Petroleum Industry Bill now Petroleum Industry Act, subsidy became a matter of law, because it is already in the Petroleum Industry Act that petroleum products will be sold at market-determined prices.
Even though the Federal Government has gone into discussion with Labour to find a lasting solution, the outcomes of the discussions and negotiations between the Federal Government and labour cannot override the Petroleum Industry Act which has eliminated fuel subsidy.
Nigerians must support the government on subsidy removal this time because we shouldn’t be spending so much subsidising petroleum products.
For those that thought the PIA is only targeted at subsidy, I would like them to know that PIA would also attract investments to Nigeria.
Indeed, the PIA will enhance the Nigerian petroleum industry’s reputation, open the door to new investments, and ultimately strengthen its position to meet the world’s growing demand for energy.
The enactment of this legislation is especially timely as the investment outlook becomes clouded by efforts aimed at accelerating a lower-carbon future.
Furthermore, the PIA will help harness Nigeria’s potential to achieve its programme of raising oil production to four million barrels per day and oil reserves to 40 billion barrels.
On a final note, the government must utilise the resources available from stoppage of subsidy more efficiently to create social welfare and infrastructure improvement programmes that would not only improve the quality of life for Nigeria’s poorest but also put the country on track to meet its development goals.
Adewole Kehinde is a Public Affairs Analyst based in Abuja and can be reached via 08166240846, 08123608662. E-mail: kennyadewole@gmail.com
