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Nigeria Scraps Fuel Subsidy, Cut Petrol Price

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Nigerian President Muhammadu Buhari

The Nigerian Government announced on Friday that it has scrapped the Petroleum Support Fund, also known as fuel subsidy.

Speaking to journalists at the Port Harcourt refinery where he had spent Christmas inspecting the facility, the Minister of State for Petroleum, Ibe Kachikwu, said the government could no longer pay the subsidy due to the fraud tainting the scheme.

Mr. Kachikwu, who is also the Group Managing director of the Nigerian National Petroleum Corporation (NNPC), also added that the government could no longer afford the payment due to the dip in its revenue, caused by the drop in crude oil prices.

He said a new pricing template he signed off on Thursday effectively removed the payment of subsidy on petrol and that oil marketers would be informed of the development in the coming days.

The official price of petrol is N87 but it is sold for higher prices in many states of the federation.

When pressed on what the new price of petrol would be following the removal of the subsidy, Mr Kachikwu said it would sell for below the current official price, maybe as low as N85 per litre.

“It (new pricing regime) is out,” the minister said. ”I signed off on it yesterday (Thursday). I imagined that in the next couple of days the marketers would get advice on that. The nice thing about the PPPRA, where I signed up on it yesterday is that the price will be far below N87,” he said.

“So for the first time, people will understand that the pricing modulation I was talking about is not a gimmick. It is for real. We have gone to find out how we will be able to fluctuate this market to reflect what the reality of the crude market is. The objective is that one, we cannot afford to continue to subsidise.

“We can’t even understand where those subsidies were going to. There are a lot of fraud elements in it so we need to cut that off.

“The second is the earning capacity of the Federal Government is deteriorating by the day with lower prices of crude and come out more,” he said.

The call for government to scrap the payment of subsidy on petrol has become louder recently following the drop in crude oil prices.

Last week, a leader of the ruling All Progressives Congress and former Governor of Lagos, Bola Tinubu, joined the call for the government to scrap the subsidy regime.

Mr. Tinubu, who had opposed the removal of the subsidy under the administration of former President Goodluck Jonathan, said subsidy was originally a good idea, but it had since been “perverted”.

He, therefore, urged the government to divert the money it is currently paying on subsidy to other social programmes and infrastructure that would have more rewarding impacts on the people.

“In a perfect world, I wish we could sanitize the subsidy regime and thus continue (with) it. However, I have reached the conclusion that there are too many demons in the system for this hell to be converted into good earth let alone heaven,” he said while speaking at the 10th memorial anniversary of left-wing politician and scholar, Bala Usman, in Kaduna.

“I would choose to remove the subsidy and use the money to help people – let us feed our school children, with our local produce promote agriculture, create jobs and start erecting a social safety net for the vulnerable among us in true need,” he added.

On Tuesday, President Muhammadu Buhari told a joint session of the National Assembly that he had directed “the Petroleum Products Pricing Regulatory Agency (PPPRA) to adjust its pricing template to reflect competitive and market driven components” that would keep the price of petrol selling at “N87 per litre for now.”

According to Mr Kachikwu, the President’s comment was informed by the analysis that was done that put the price at below the official price of N87.

“But in applying that where we landed when we did the analysis for the very first time was about N85 or N86 so it is below N87.

“And maybe the first price that will come will reflect it. That was why Mr. President said that prices will be N87 for now. And that is what we have in mind,” he said.

The announcement on fuel subsidy removal came two days after the Nigerian Labour Congress threatened it would vehemently oppose any cut on the subsidy regime.

At the end of its Central Working Committee meeting in Abuja, the NLC said the discordant pronouncements from government officials on plans to cut subsidy was creating panic and confusion in the system, even as it reaffirmed its opposition to any fuel price increase.

An attempt by the government to cut fuel subsidy in 2012 led to what came to be known as the #OccupyNigeria protest.

Nigerians were outraged when in the early hours of January 1, 2012, then President Jonathan announced the removal of subsidy from petroleum products.

The then president’s New Year announcement meant that PMS, which sold for N65 a litre – with subsidy – would go for N141, more than a hundred per cent increase.

This action translated into more than one hundred per cent increase in fares, food, rents and virtually every all goods and services in Nigeria.

Petrol is central to Nigeria’s economy and literally close to every Nigerian’s heart.

Expectedly, that announcement immediately drew Nigerians to the streets, sparking spontaneous protests across the country.

But it soon became clear that the subsidy regime was characterised by monumental fraud.

For instance, to benefit from the 2011 fuel subsidy largesse, some oil companies “manufactured” fictional oil ships (vessels) they claimed traversed seas and oceans of the world carrying imaginary petrol, with Nigeria the final destination of the product, a Technical Committee set up by the Federal Government discovered.

For supplying this phantom product to Nigeria, some seven companies pocketed a princely N13 billion naira from the 2011 fuel subsidy payments, the committee’s report, exclusively obtained by PREMIUM TIMES at the time, showed.

Some other companies, not wanting to create fictional vessels, decided to space- travel existing ones; such that real vessels, which were definitely in countries like China and UAE, were purported to have discharged petrol into storage depots in Nigeria at the exact time they were in those other countries. The 11 companies involved in this category of fraud pocketed N21 billion from the 2011 subsidy payments, the report said.

Sources in the oil industry revealed at the time that those companies were able to perpetuate the crime with the help of field officers of the Petroleum Products Pricing and Regulatory agency (PPPRA) and the Department of Petroleum Resources (DPR), men of the Nigerian Navy, Nigeria Custom officers, banks and others involved in the various stages of fuel importation.

The companies and their owners are still being prosecuted by the Economic and Financial Crimes Commission.

Premiumtimesng

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Government

Lagos State Moves to Completely Ban Okada, Keke, Introduces Minibuses

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Minibus - Investors King

The Lagos State Government on Monday announced plans to completely ban the use of motorcycles (okada) and tricycles (Keke) due to rising crime and lawlessness across the state.

The announcement was made after a stakeholders’ meeting held at the Adeyemi Bero Auditorium, Alausa Secretariat, Ikeja.

In the meeting attended by Governor Babajide Sanwo-Olu, the Speaker of the House of Assembly, Mudashiru Obasa; the Chief Judge, Kazeem Alogba; the Commissioner of Police, Hakeem Odumosu, traditional and religious leaders and members of the civil society, among others, the governor said the string of lawlessness daily witnessed from the confrontation between commercial motorcyclists and law enforcement agencies required urgent action.

Based on all that we have seen and experienced in the past couple of weeks, as well as the increasing threat posed by the activities of commercial motorcycle operators to the safety and security of lives, we will be announcing further changes to the parameters of motorcycle and tricycle operations in the state in the coming days. No society can make progress amid such a haughty display of lawlessness and criminality,” he added.

Sanwo-Olu said from next week, the state would be inaugurating the First and Last Mile buses next week, which would take the routes the motorcycles were plying.

The state Commissioner of Police, Odumosu, raised the alarm over rising security breaches from the menace of okada operations in the state.

He said between January and early this month, 320 commercial motorcycles were impounded in 218 cases of criminal incidents in which 78 suspects were detained and 480 ammunition recovered.

In the same period, the Lagos police boss said Okada accounted for 83 per cent of 385 cases of avoidable fatal vehicular accidents in Lagos.

At the end of the meeting, a 12-point resolution was reached, among which was a ban on Okada “as a means of transportation in the state.”

 

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2023 Voter’s Registration Will Be Online, Biometric To Be Captured Physically- INEC

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INEC-PVC

The Independent National Electoral Commission (INEC) yesterday unfolded plans to allow online filing during the continuous voter registration for the 2023 general election.

The National Commissioner and Chairman, Information and Voter Education Committee of INEC, Mr. Festus Okoye, however, said only the biometric would be captured physically by INEC officials.

But the commission suffered another setback yesterday as arsonists torched its office in Ohafia Local Government Area of Abia State.

Okoye, during a stakeholders’ meeting on expanding voter access to polling units in Kano yesterday, said: “On June 28, the voter registration exercise for those above 18 years and those who have not registered before will commence with two new innovations. Those versatile with computer can register online and only visit a registration centre to capture their biometrics.”

Okoye stated that the online registration would be introduced to reduce crowd at registration centres in line with COVID-19 protocols.

The commission called on citizens, especially those willing to contest elections, whose voter cards have been defaced, whose names were wrongly spelt or addresses and locations wrongly captured to present themselves for authentication or correction.

INEC also called for valid data of all those with disabilities or physical challenges to be captured during the continuous registration for proper projections ahead of the 2023 general election.

INEC also warned political parties and politicians who have started campaigning to desist from doing so.

Okoye said: “There is a ban on political campaigns which has not been lifted yet. And I find it necessary to draw your attention for you to understand the legal implication of violating this ban.

“I have listened to comments on radio stations, which are capable of heating the polity. Media organisations should avoid providing platforms for such comments. The media should try to curtail such tensions.

“Political parties, politicians and their supporters should understand there is a legal framework for campaigns and it has not commenced yet.”

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No Plans To Relocate AFRICOM HQ To Nigeria Or Any Part Of Africa- U.S. Replies Buhari

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AFRICOM HQ

The United States has said there is no plan to relocate its Africa Command from its current base in Germany to Nigeria or any other part of Africa despite the worsening state of insecurity in the region.

The US gave the response barely two weeks after President Muhammadu Buhari appealed to the US government to consider relocating AFRICOM to Africa to assist Nigeria and other adjoining countries to combat worsening terrorism, banditry and other security crises.

The President made the plea in a virtual meeting with the US Secretary of State, Antony Blinken, on April 27.

Germany-based Africa Command (AFRICOM) is the US military headquarters that oversees its operations in Africa.

Buhari’s request followed a series of recent military casualties in Nigeria’s decade-long fight against Boko Haram terrorists, fresh expansion of the insurgents’ bases to Niger and Nasarawa States, and heavy waves of abductions and killings by bandits in the North.

Buhari said, “The security challenges in Nigeria remain of great concern to us and impacted more negatively, by existing complex negative pressures in the Sahel, Central and West Africa, as well as the Lake Chad Region.

“Compounded as the situation remains, Nigeria and her security forces remain resolutely committed to containing them and addressing their root causes.

“The support of important and strategic partners like the United States cannot be overstated as the consequences of insecurity will affect all nations, hence the imperative for concerted cooperation and collaboration of all nations to overcome these challenges.

“In this connection, and considering the growing security challenges in West and Central Africa, Gulf of Guinea, Lake Chad region and the Sahel, weighing heavily on Africa, it underscores the need for the United States to consider relocating AFRICOM headquarters from Stuttgart, Germany to Africa and near the Theatre of Operation.”

However, the US government on Thursday ruled out any plan to relocate AFRICOM from its current base in Germany to Nigeria or any part of Africa.

According to the United States Department of Defence’ Pentagon, previous studies have shown that the cost of relocating AFRICOM from Germany to Africa is very huge.

In an emailed response to The PUNCH, the Pentagon said although it would continue to value Nigeria and other countries in Africa as important partners, the American government would not consider relocating AFRICOM to any part of the African continent at the moment.

This newspaper had asked if the US would consider Nigeria’s request to relocate AFRICOM to the continent.

“It would be inappropriate to speculate on any future actions. However, at this time, moving this headquarters (AFRICOM HQ) to Africa is not part of any plans, but USAFRICOM’s commitment to their mission, our African and other partners, remains as strong today as when we launched this command more than a decade ago,” US Pentagon spokesperson, Ms. Cindi King, said.

King also ruled out any plan to consider Buhari’s request in an ongoing global US defence review.

She said, “Although there is an ongoing Global Posture Review, the relocation of Combatant Command headquarters is outside the scope of its assessment. In the case of AFRICOM, previous studies have concluded that the cost associated with the relocation of this headquarters is significant and likely to incur the expense of other engagement opportunities and activities that more directly benefit our valued African partners.

“We greatly value the partnership with Nigeria and appreciate President Buhari’s recognition of the United States’ positive contribution to African peace and security, as well as other regional partners that have made similar past pronouncements. The United States remains committed to continuing our close partnership with African countries and organisations to promote security and stability.”

It’s ‘near impossible’ for America to accept Buhari’s invitation –Campbell, ex-US ambassador

Meanwhile, a former United States Ambassador to Nigeria, John Campbell, has listed reasons why it is “unlikely or near impossible” for the US government to relocate AFRICOM from Stuttgart in Germany to Nigeria or any part of the continent.

He said aside from the fact that the cost of doing so is very huge, the Nigerian military had proved to be a difficult partner for the US over the years.

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