April 16, 2024

Petrol subsidy removal: Ex-Kwara gov aspirant lauds Nigerians

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*Says petrol price will reduce

Kehinde Akinpelu,Ilorin

A former Kwara State governorship aspirant, Engineer Pastor Sunday Adebayo Babalola, has commended Nigerians for bearing the shock and pains of the removal of subsidy on Premium Motor Spirit, (PMS) popularly called petrol or fuel.

He said though the high cost of petrol was painful, the subsidy removal was inevitable as the petrol subsidy which he alleged was shrouded in corruption had endangered the future of Nigeria. He noted that FG had borrowed a stupendous amount to sustain the petrol subsidy, adding that it was financially and economically unsound to keep borrowing for consumption.

Babalola who is a retired Deputy Director of the now-defunct Department of Petroleum Resources, said he was hopeful that with competition by oil marketers, prices of petrol will reduce.

He also commended the Nigeria Labour Congress, (NLC) the Trade Union Congress of Nigeria (TUC) and their affiliates for suspending the planned strike.

He noted that the strike could have been calamitous to the already fragile Nigerian economy and the energy sector.

He urged the government to ensure that the financial inflow from the subsidy withdrawal would be harnessed and utilised in a transparent manner for the overall benefit of the nation.

Babalola said, “Thank God they have the boldness to implement it. In any case, the sitting President just gave the announcement, the immediate President, Muhammadu Buhari, maybe because he was going had said that by the end of June, there will be no subsidy again, that it was not in the budget. So technically, he removed it. The current President confirmed the removal during his inaugural speech, and that is good! Also the Nigerian National Petroleum Company Limited (NNPCL) came up with a new petrol pump price template and we say the prices in various places. People can buy and sell what they have. Their negotiation with sellers will be strictly to businesses, their negotiation with depots will be strictly to business and everything will be controlled by the market economy. You will see that eventually, we will no longer see any queues in Nigeria. queues will be a thing of the past because if you do not like the price at my petrol station, you will go and buy from another person.

“The prices of petrol have not been that the same in Lagos, Sokoto, Enugu and other states? In the big cities, Lagos basically and Abuja, Lagos consumes maybe 60 per cent of what the nation consumes and the other ones share it. The people who are bringing food from rural areas to the cities buy fuel at exorbitant prices and they are paying exorbitantly.

“The price of petrol will come down because it is just like the telephone prices came down. When mobile telephones came newly to Nigeria, there was a time we used to buy a sim card for N35,000, which was almost equivalent to $500 at that time. Today, you get Subscriber Identity Module (SIM)  card for free. So when the market forces take effect, everything will come down. The diesel price is already coming down.”

He added, “Though there are initial pains, such as the petrol pump price increase, and the attendant hike in transportation and possible inflation; still we are going to make progress. The question now is since it has been removed, what are we going to use the money that we are gaining from the removal to do? There was a time they budgeted N450m for subsidy but by the end of that year, it was N2trn they spent. How? Why and where? The previous year, it was N250bn but that year N450 billion was budgeted and they spent close to N2trn. It would have continued to be like that except that President Tinubu has removed it.

“They should also plough the money that will be saved from subsidy withdrawal into things and sectors that will benefit the people and transform the nation. There are ways they can do it. Do not ask me the ways, that is my own trade secret. If they want the way, they should invite me and I will tell them.”

Babalola who currently is a director, of All Grace Energy, said he was not in a position to know why the administration of the outgone President Muhammadu Buhari did not implement subsidy withdrawal.

He said, “I will not say it is right or that it is wrong because I do not have all the facts that they had. When you are thinking from outside the system, you can propound so many theories and you can come up with many suggestions. But the reality is that you may not have seen some of the things they saw and they will not openly reveal them because of security implications and confidentiality. I do not have the facts they had so I will not be able to say they did right or that they did wrongly. But sincerely speaking, talking from my own point of view, I think the removal of subsidy will move the country forward. I will keep saying that anytime.

“Except that the petrol subsidy has now been removed, we would have kept roaming in the same place. We do not even know how much we are consuming. When I was in DPR, it was 36 million barrels per day that Nigeria was consuming but now they said it is 63 million. What has changed? Has the number of vehicles increased? Are people using their generators increased?”

In developed countries, the margin of increase is always realistic and small. For instance, they may use 10 million two years ago, 10 million last year and 10.5 million this year. It does not increase astronomically.

“But why did our own suddenly jump from 36m to 63m and even different organisations are giving different figures? Such a thing should be checked and what is creating is open doors for corruption that we see.

“The refineries should have been privatised. But now that the NNPCL is a limited liability company, it will do better. But you have four refineries that are not working at all and you are paying staff salaries; it does not make sense. Only the govenrment can do that. It is not about privatising refineries and removing the subsidy. The refineries themselves should know that they have to work in order for them to make money. The crude oil they would have sent to the refineries, they send the crude abroad. They import white products from that crude oil. We are losing money. You are exporting crude oil and you are importing the white products at exorbitant prices! I do not know what arrangement they reached with all the people who are helping them to do that. Until we study that agreement, we will not be able to say exactly what it should be. You have to remember that people like me sitting outside, it is different from when I was inside. When I was inside, I could go around and get the data but now I am outside, I can not get the data and the facts around those things to be able to give them concrete advice. But I can tell you that it will be difficult for us to make any progress if we were still subsidising white products. You are going to use the money to repair the refineries. Why are you going to get the money, if you even keep borrowing to keep subsiding? They have made Turn Around Maintenance (TAM) many times on the refineries. How do you service a car that has not been working and you keep servicing it, you change parts and it has not been working and you keep spending money on it? And that is what they have been doing. Engaging in TAM on something that has not been working for a long time.”

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