Remove petrol subsidy, economic council tells Buhari, warns states

By AdvocateNews on 10/05/2021

Share on facebook Yahoo mail icon Gmail icon

Views: 620


The Presidential Economic Advisory Council has asked President Muhammadu Buhari to remove subsidy on petrol and adopt a pricing regime that reflects the cost of the commodity.

Buhari had in 2019 set up the council chaired by Prof Doyin Salami to replace the regime’s defunct Economic Management Team led by Vice-President Yemi Osinbajo.

The council, charged with the responsibility of advising the President on economic policy matters including fiscal analysis, economic growth and a range of internal and global economic issues working with the relevant cabinet members and heads of monetary and fiscal agencies, reports directly to Buhari.

Its advice that petrol subsidy be removed formed part of its presentation at its sixth regular meeting with the President last Friday, when it also warned that the subsidy regime would worsen solvency of state governments.

According to the document presented at the meeting, the council drew Buhari’s attention to three issues that it said required urgent attention.

They include the need for policy clarity with regard to fuel subsidies which it said would help resolve the dilemma which rising crude oil prices present; the worsening security environment which it said had adversely affected food production leading to higher prices; and the need for the Petroleum Industry Bill to encourage investment in Nigeria’s oil and gas sector.

The council noted that improving crude oil prices had led to what it called the Nigerian ‘dilemma.’

The dilemma, it said, resulted from the conflicting implications of higher crude oil prices on the nation’s economy.

According to the council, rising crude oil prices improve public sector revenue and reserves of foreign currency while higher crude oil prices mean that the cost of imported petrol should be higher than the N167/litre being paid at filling stations.

It noted that the restoration of subsidies created a set of significant problems. It added  that as there was no provision for subsidy payments in the 2021 budget, such payments would have to be done by the Nigerian National Petroleum Corporation thereby further reducing revenues accruing to the Federation Account.

This situation, it said, was capable of worsening the solvency of many state governments and could take the country back to 2015 when the Federal Government had to provide ‘bailout’ funding to the states.

The council stated, “As there is no provision for subsidy payments in the 2021 budget, such payments will have to be done by the NNPC thereby further reducing revenues accruing to the Federation  Account.

“The solvency of many state governments will worsen – this could take us back to 2015 when the Federal Government had to provide ‘bailout’ funding to the states.”

The Salami-led group added that restoration of subsidy made investment in Nigeria’s downstream oil sector unattractive.

The document read, “Council advises as follows: there is an urgent need for clarity and consistency in petrol pricing policy.

“Subsidy on petrol be removed and a pricing regime which reflects the cost of petrol adopted.

“It is noteworthy that with the exception of petrol, the prices of all other petroleum products have been deregulated; the cost of retaining the subsidy outweighs the benefits, or that the benefits of removing the subsidy are far greater than the costs.

“Data published by the National Bureau of Statistics also show that petrol prices are not the same across Nigeria.

“In March 2021, petrol prices range between N162.17 and N200.87/litre –the highest being in Lagos State whilst the lowest prices are obtained in Adamawa State.

“Council is especially concerned that in addition to further worsening government revenue, re-introduction of subsidies will jeopardise investment in the oil sector and also create uncertainty about general government policy on pricing.”

On security, the council noted that there was a consensus on the worsening of the security situation in Nigeria.

It listed the sources of security challenges to include Boko Haram and ethno-religious conflicts; political violence; economic and resource-based violence; organised violent groups; and herders/farmers /settlers clashes.

The council noted that violence had had impact on human capital and on poverty and vulnerability while physical capital and infrastructure are often damaged; while business and investment suffer.

It noted that the economic cost of insecurity was estimated at 2.6 per cent of GDP in 2020, or $10.3 billion.

On the way out, the council advised the FG to among others, “Defeat Boko Haram decisively, as a decisive defeat is necessary to permanently keep the insurgency at bay.

“There is need to review strategy as to the way forward, examining all options -including seeking the assistance of external powers.

“Improve the implementation of policies aimed at improving access and quality of education in underserved areas.

“Implement existing law on compulsory attendance of primary school to reduce the number of out of school children, a key recruiting ground for thugs.

“Resolve grievances around exclusion from access to power, opportunity, and representation through dialogue.

“To be effective, government should involve civil society, the private sector, regional and international organisations focused on peace and conflict resolution in roundtable discussions aimed at resolution of grievances.”

On the PIB, the council noted the progress of the bill through the National Assembly.

It said, “The importance of this bill to the national economy cannot be overstated.

“When enacted, this law will have a profound effect beyond the oil and gas sector.

“Potentially, this bill could provide a basis for building and industrial economy for Nigeria.

“Implementation of the Paris Agreement has seen a continuous global transition away from fossil fuels towards renewables as primary energy source.

“The PIB will join the National Petroleum Policy and the National Gas policy in defining the environment for investment in the oil and gas sector and also influence sentiment around Nigeria as an investment destination.”

In a statement released by the Special Adviser to the President on Media and Publicity, Femi Adesina, at the end of the meeting on Friday, the Presidency left out the issue of removal of petrol subsidy from the issues raised by the council while it mentioned the remaining two issues- security and the PIB. – Punch.

Posted 10/05/2021 06:17:51 AM

 

Share on facebook Yahoo mail icon Gmail icon


 

You may also like...
Buhari would’ve lost if I didn’t support him...

PANDEF fumes, North to get 30% oil profit...

2019: Enugu PDP urges seven-day prayers, fasting for...

Nigerians defy rally ban, protest tariff hike, corruption,...

Rotational Presidency unconstitutional – Northern Governors

Edo Election: PDP hails Buhari's security arrangement

Kogi West Senate Seat: Melaye out, Adeyemi in...

Queen Naomi divorces Ooni of Ife, says he...

Enugu IPOB, Security agents clash: Police confirm death...

Cardinal Onaiyekan, Catholic Bishops visit Enugu Govt House,...

Ugwuanyi assures woman whose son was killed by...

Bayelsa judgment: Supreme Court fines Afe Babalola, Olanipekun...

 

Latest News 2023: Enugu Gov Ugwuanyi will choose successor - Sen Nnamani Reject report of Enugu Judicial Panel on Police Brutality, member urges Gov. Ugwuanyi Wife of popular hotel owner allegedly drugs, stabs him to death Ex-Kogi Poly Bursar, Dr. Adamu to be buried January 29 Infidelity: Gospel singer Sammie Okposo tenders public apology, suspends self from ministry Mercy Aigbe gives new husband three hot romantic names Fuel subsidy: NLC suspends planned nationwide protests Ebonyi govt declares fmr. Reps member wanted over statement on facebook 2023: Don’t elect people above 70 as president – Makinde warns Nigerians PRODA crisis deepens as agency DG, Board, Ministry clash Hanifa’s school proprietor arraigned, remanded till February Reps majority leader welcomes 28th child ... expects to have 30 by 2023

 

Most Read Fleeing ex-DG Imo Broadcasting Corporation who stabbed wife to death arrested (264,502 views) Full Text of Governor Ifeanyi Ugwuanyi’s 2016 Budget Speech (264,501 views) I’ve no Coronavirus, govt wants to kill me – Anambra Index case (264,501 views) FG sends new directive to banks, schools as Buhari extends lockdown by four weeks (264,501 views) Sickle cell support group seeks government intervention (264,500 views) Ebonyi bans embalming of corpses in homes (264,500 views) Ugwuanyi commends FG’s siting of ICT University in Enugu (264,499 views) Ex-Heads of State will protect Jonathan from persecution —Kukah (264,498 views) ASUU strike: Senate intervention ends in deadlock (257,282 views) HUSHPUPPI: CRIMINALS HAVE NO TRIBE. THEY SHAME ALL OF US... (256,202 views) All you need to know about Peter Obi, PDP VP Candidate (198,262 views) DEMOCRACY DAY: President Muhammadu Buhari’s full speech (196,615 views)

 

 

SECTIONS FAITH (158) EDITORIAL (21) NEWS (7,872) POLITICS (498) SOCIETY (133) SPORTS (62) BUSINESS (376) HEALTH (60) EDUCATION (51) ENTERTAINMENT (58) INTERNATIONAL (188) TECHNOLOGY (6) COLUMNISTS (57) LETTERS (4) OPINION (42)

 

 


There are no video entries posted yet.