ABUJA (Sundiata Post) – During Wednesday’s general debate on the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for the 2016, 2017 and 2018 fiscal years, some senators called for the complete removal of subsidy on petroleum products to save the nation the huge sums that are `wasted’ on the subsidy of the premium motor spirit (PMS).
Some of the senators, who spoke on the executive communication from President Muhammadu Buhari, argued that even with the subsidy, petroleum products still sell higher than the regulated price in all parts of Nigeria apart from Abuja, Lagos and Port Harcourt.
The senators also advocated for more borrowing to industrialise the nation.
In his contribution, Senator Ben Murray Bruce noted that there is no need of borrowing N2 trillion or N3 trillion every year, when the nation could borrow a lump sum and utilise it in industrialising the nation.
Bruce, who pointed out that Brazil took such loans to develop, suggested that Nigeria should emulate such economic move, and spread the repayment over 50 years.
“If you have to borrow N50 trillion, then borrow that, and industrialise Nigeria over night,” he said.
Speaking on the oil benchmark of $38 per barrel, Bruce advocated that the nation’s budget should be reviewed every three months and adjusted, if need be in line with the economic realities or oil prices.[pro_ad_display_adzone id=”70560”]
He also stressed that successive governments had maintained the wrong argument on the deregulation policy.
Bruce, who observed that the previous governments focused more on the price of petrol rather than the cost of transportation, stressed that a subsidised transportation policy would cushion the effects of deregulation.
“Government should ask what the price of transportation is, not how much a litre of petrol is. We should think of a mass transit policy, which will cost no more than N100 billion, which is about 10 percent of what we spend on subsidy. If people spend the same amount of money on transportation, after deregulation, nobody will protest on the streets.
“Nobody in UK or US knows the price of petrol. But in Nigeria, everybody knows because we have made the wrong arguments,” he said.
He advocated that the states should have more money than the Federal Government because the state governments are closer to the people, who need to be developed.
In his submission, Senator Toyo Alasoadura also advocated that government should go and borrow “heavily.”
“Let us borrow on a 50 year plan, develop the nation’s infrastructure, and we are in safe hands,” he said.
Alasoadura, who maintained that the oil price benchmark was okay, however, added that a quarterly review of the budget, in line with realities, would be necessary.
Senator Solomon Adeola Olamilekan also argued in favour of more borrowing in a lump sum rather than the borrowing that is done in bits and pieces.
“I will suggest that we leave the benchmark for now at $38 per barrel as proposed by the President, but allow the committee to go back, and do a thorough job and advise us accordingly. Projection of N4.5 trillion as the independent revenue of the Federal Government for 2016 is a little bit on the high side.
“But when we look at something in the region of N4 trillion, we can start looking at the realities on ground and the indices before us,” he said.
Also in his contribution, Senator Dino Melaye queried why the nation has continued to pay subsidy, even when the oil price has presently dropped from over $100 to about $45.
Senator Bassey Akpan, while stressing on the need for timely submission of the MTEF, urged the Senate to take a fundamental stance on fuel subsidy payments.
“The issue of subsidy is not sustainable. So, I believe that, as a people, we must understand that we have been buying fuel at N195 per litre. So, where is the benefit of subsidy?” he queried.
However, Senator Jubrin Barau, who vehemently opposed the removal of subsidy, stressed that it was a form of welfare package for the citizenry.
He said that even the European countries which advocated the removal of subsidy, has welfare packages for their citizens.
“I say no to removal of oil subsidy. It is a kind of welfare arrangement,” he said.
He said that the major challenge in the oil sector is that of pipeline vandalism, which inhibited the pumping of crude to refineries and the pumping refined products to the depots.
Other senators, who spoke on the subject matter, urged the executive to be more timely in presenting the two documents.
They, however, called for the diversification of the nation’s revenue, as oil revenue is now unsustainable.
The Senate, thereafter, referred for further consideration of the MTEF and FSP document to its committee on Finance and Committee on National Planning to report back in one week.