A groundswell of opposition greeted the Federal Government’s plan to remove fuel subsidy next year and replace it with a N5,000 monthly transport stipends to 40 million Nigerians
The Senate, labour leaders as well as experts led the charge on Wednesday.
While the Senate said there was no provision for such grant in the 2022 budget, the Trade Union Congress (TUC) expressed shock that government could come up with this when negotiations on subsidy removal between government and the Labour movement is still ongoing, saying it is unacceptable.
Similarly, the Nigerian Labour Congress on its part, described the development as an open invitation for mass revolt in the country.
The implementation of the proposed N5,000 monthly grant to 40 million Nigerians will cost the Federal Government N2.4 trillion annually, which is 81.71 per cent above the average annual subsidy payment from 2016 to 2019.
Speaking with reporters on Wednesday after the submission of its committee budget proposal, Chairman, Senate Committee on Finance, Olamilekan Adeola (APC, Lagos West), disclosed that there was no provision for N5,000 monthly grant for 40 million Nigerians for transportation allowance in the 2022 budget currently before the National Assembly.
Adeola added: “What are the criteria that would be used to determine beneficiaries of the transportation allowance? What are the criteria that would be used to determine beneficiaries of the transportation allowance?
“For us we still believe it is news because this budget we are considering contains subsidy and if we are passing a budget with subsidy in the fiscal document, we can’t speak because that is the document that is currently before us.
“The Minister of Finance, Budget and National Planning was quoted as saying that 40 million Nigerians will be paid N5,000 as transportation allowance, in lieu of the fuel subsidy.
“I don’t want to go into details for now. I believe that if such a proposal is to come to pass, a document to that effect must be sent to the National Assembly for us to see how feasible this is and how we identify the 40 million Nigerians that are going to benefit from this process. “There are still a lot of issues to be deliberated upon and looked into if eventually this will come to pass and how do we raise the money to pay these 40 million Nigerians?
“So, this is not provided for already in the 2022 budget. We don’t have anywhere in the budget where 40 million Nigerians will collect N5,000 monthly as transportation allowance, totaling N2.4 trillion.
“I know that there must be a budgetary provision for this for us (National Assembly) to consider. That is why I said it is still news out there until it formally comes to the National Assembly for either a virement to the budget or re-ordering of the budget.
“For now, I still want to take it as a rumour and as news until it is formally presented before the National Assembly.”
The NLC in a statement by its President, Ayuba Wabba, warned that the government was planning to set the nation on fire, contending that government’s new position was being anchored by the International Monetary Fund, IMF and the World Bank.
The NLC statement reads: “A few hours ago, the Group Managing Director and Chief Executive Officer of the Nigeria National Petroleum Corporation (NNPC), Malam Mele Kyari announced that the price of petrol could jump as high as N320 and N340 from February 2022.
“The NNPC GMD/CEO said that the price increase would be consequent on the plans by the Federal Government to remove subsidy on Premium Motor Spirit also commonly referred to as petrol or fuel. The grand optimism of the NNPC GMD was predicated on the claims that the removal of the fuel subsidy is now backed by an act of parliament probably the Petroleum Industry Act which was recently signed into law.
“The assertion of the NNPC GMD was re-echoed on the 23rd of November 2021 by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, at the launch of the World Bank Nigeria Development Update (NDU), titled ‘Time for Business Unusual’ where she announced government’s plans to disburse N5000 to 40 million poorest Nigerians each as transport grant to cushion the effect of the planned removal of the fuel subsidy.
“The disclosures by the NNPC GMD and the Minister of Finance were in symphony with the positions of the World Bank Country Director for Nigeria, Mr. Shubham Chaudhuri and the International Monetary Fund urging the Federal Government to do away with fuel subsidy.
“The response of the Nigeria Labour Congress is that what we are hearing is the conversation of the Federal government with neo- liberal international monetary institutions. The conversation between the government and the people of Nigeria especially workers under the auspices of the trade union movement on the matter of fuel subsidy was adjourned sine die so many months ago.
“Given the nationwide panic that has trailed the disclosure of the monologue within the corridors of government and foreign interests, the Nigeria Labour Congress wishes to posit that it continues to maintain its rejection of deregulation based on import driven model.
‘’It is difficult to convince Nigerian workers why our dear country is the only country among the OPEC member countries that cannot produce its own refined petroleum products and thus adopts the neo-liberal import production model of refined petroleum products.
“We wish to reiterate our persuasion that the only benefit of deregulation based on import driven model is that Nigerian consumers will infinitely continue to pay high prices for refined petroleum products.
‘’This situation will definitely be compounded by the astronomical devaluation of the Naira which currently goes for N560 to 1US$ in the parallel market. Thus, any attempt to compare the price of petrol in Nigeria to other countries would be set on a faulty premise as it would be akin to comparing apples to mangoes.
“The contemplation by government to increase the price of petrol by more than 200% is a perfect recipe for an aggravated pile of hyper- inflation and astronomical increase in the price of goods and services. This will open a wide door to unintended social consequences such as degeneration of the current insecurity crises and possibly citizens’ revolt. This is not an outcome that any sane Nigeria wishes for.
“The argument that the complete surrender of the price of petrol to market forces would normalize the curve of demand and supply as is being wrongly attributed to the current market realities with cooking gas, diesel and kerosene is very obtuse.
‘’The truth is that these commodities which Nigeria can easily produce have been priced out of the reach of most Nigerian families with majority of our people resorting to tree felling and charcoal for their energy needs.
“We wish to warn that the bait by government to pay 40 million Nigerians N5000 as palliative to cushion the effect of astronomical increase in the price of petrol is comical, to say the least.
“The total amount involved in this queer initiative is far more than the money government claims to spend currently on fuel subsidy. Apart from our concerns on the transparency of the disbursement given previous experiences with such schemes, we are wondering if government is not trying to rob Nigerians to pay Nigerians. Why pay me N5000 and then subject me to perpetual suffering?
“Clearly, government thoughts on the so-called removal of fuel subsidy are cloudy and appear to be a ‘penny wise-pound foolish’ gamble. It is clear that the palliative offered by government will not cure the cancer that will befall the mass of our people who suffer the double jeopardy of hyper-inflation while their salaries remain fixed.
“As we had done several times, we call on the federal government to consider various options that can help Nigeria navigate out of the quagmire constructed by the failure of successive governments to embrace developmental governance and accountable leadership.
“Some of the viable options that can help insulate the domestic consumers from the market pressure brought about by the free fall of the Naira by making arrangement with contiguous refineries not far from Nigeria to swap crude oil with refined petroleum products; to accelerate work on the rehabilitation of Nigeria’s four major refineries which are all currently operating at near zero installed capacity; and establish empirical data on the quantity of refined petroleum products consumed daily by Nigerians.
“It is unfortunate that this record remains a myth and a huge crater for all manner of official sleaze and leakages in the downstream petroleum sub- sector of Nigeria’s oil and gas industry.”
Secretary-General of TUC, Musa Lawal, said: “We are surprised and shocked with the government pronouncement. We do not know how the government came about it. The government is calling for trouble if they think they can go ahead with subsidy removal without labour.
“The Presidential Committee made up of government representatives and Labour has not concluded its assignment. Our last meeting was in April. This new position is totally unacceptable to us.
“Let us look at the issue of N5,000 for about 40 million Nigerians. How did the government arrive at the figure? How did they determine the targeted beneficiaries? Most Nigerians are aware that similar money was given out, the identities of the beneficiaries have remained a subject of controversy and debate among Nigerians.”
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