Lagos – The Federal Government on Monday lauded Civil Society Organisations (CSOs) for supporting the recent removal of petroleum subsidy which was necessitated by the current realities in the sector.
The Minister of State for Petroleum, Dr Ibe Kachikwu and his Information, Culture and Tourism counterpart, Alhaji Lai Mohammed, made the commendation during an interactive session with CSOs in Lagos.
Kachikwu noted that the liberalisation of the petroleum sector, which had increased the pump price of fuel from N86 per litre to N145 per litre, was taken as a last option by the government.
He assured Nigerians that the billions of dollars that would have been paid on subsidy would be channelled towards infrastructural development and job creation.
According to him, it is wrong for anybody to compare the present situation to that of 2012 because oil was then being sold at 110 dollars per barrel.
He said further that there was no strategic plan to implement the subsidy gains for the benefit of ordinary Nigerians.
“When I assumed office, marketers were being owed a total of N600 billion in subsidies.
“We realised that when subsidy first started, it was an average of 100 million U.S dollars, 200 million U. S dollars cost to the Federal Government a year.
“Over the last six years, subsidy had moved on to the equivalent of N1.2 trillion to N1.4 trillion; In fact, if you look at what was paid between 2012 and 2015, we paid a total of almost eight trillion naira in subsidy.
“So subsidy had left the initial perception of a marginal support for a particular product in the sector and had become even almost 50 per cent of what we spend on a national basis as our budget.
“ Subsidy became a major vehicle for corruption,” Kachikwu said.
According to him, the situation was worsened by the decline in oil revenue which currently sells for about 45 dollars per barrel and the inability of oil marketers to access Forex from the Central Bank of Nigeria (CBN).
“When we produce 2.2 million barrels of oil, what comes to the Federal Government is about a million barrels. 1.2 million goes to the oil companies through their own share of crude participation.
“So, out of this one million is what we take the 445,000 barrels from.
“So what is left for the country is rather about 555,000 barrels or something in that neighbourhood.
“That is the volume of crude that we then sell out on export basis and get money into the Federation Account.
“The other 445,000 barrels go to the Nigerian National Petroleum Corporation (NNPC) which is supposed to deal with the downstream by refining it or bringing in the product and thereafter send the money back to the Federation Account.
“That’s the way it works,” Kachikwu said.
He explained further that due to the shortfall in government’s revenue, many states could no longer pay salaries while the Federal Government was finding it difficult to fulfill its electioneering promises to Nigerians.
“Marketers were profiteering by buying at less than N75 per litre and selling for between N150 and N400 across the country.
“So we simply had transferred subsidy into a huge arbitrage fraud. So the government wasn’t making money, you weren’t getting convenience in terms of pricing but some people were making tons and tons of money.
“I think it would have been absolutely immoral for me to have continued that sort of situation and say that is fine.”
Kachikwu said the government had budgeted N500 billion as an intervention grants to eight million poor Nigerians, adding that other palliatives included recruitment of teachers, granting of interest free loans to market women, artisans and traders.
He described President Muhammadu Buhari as a socially committed president who always had the interest of ordinary Nigerians at heart.
Also, Mohammed said the government would continue to implement policies geared towards alleviating poverty in the country.
He assured the CSOs of sustained regular interactions, particularly on issues bordering on the state of the nation.
On his part, the Chairman of the Interactive forum and initiator of the Pentecostal Fellowship of Nigeria (PFN), Dr Moses Iloh , urged the government to sustain the fight against corruption in the country.
“I want to believe that we ourselves have to determine to become instruments and vehicles of change. There is nothing the president can do if we don’t agree with change,” he said.
Similarly, Mr Debo Adeniran, Executive Director, Coalition Against Corrupt Leaders (CACOL), said the platform provided CSOs the opportunity to interact and demand for accountability from their leaders. (NAN)