Subsidy removal must come with fiscal responsibility, financial prudence _Organized laour


Sopuruchi Onwuka

Senior workers union in the country insist that government has not demonstrated any need for austerity measures in the economy, warning that sacrificing the life of impoverished Nigerian masses through planned removal of subsidy on petrol prices would hardly salvage the economy from prevailing official extravagance.

President of the Trade Union Congress (TUC) of Nigeria, Comrade Festus Osifo, declared at the 2022 Strategic International Conference of the Association of Energy Correspondents of Nigeria (NAEC) said that Nigerians are willing to make sacrifices for the economy if there were exemplary measures in the political leadership.

President of TUC, PENGASSAN, Comrade Festus Osifo

Comrade Osifo who is also the President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN)  stated that Nigerians would only accept tighter fiscal measures including withdrawal of subsidies if government officials would also volunteer to give up  part of their monumental financial entitlements.

Panel members at the conference also pointed out that Nigerian political office holders earn the highest financial entitlements on earth but in a country with highest number of poor people on earth and where minimum monthly age is difficult to raise from N1800 of $26.

They also pointed at massive stealing going at critical revenue earning agencies of the government, faulty computation of official subsidy figures siphoned from income sources, reliance on importation in a country that has robust upstream and midstream infrastructure and facilities for hydrocarbon production and processing.

Comrade Osifo maintained that it is illogical to transfer the cost of government’s inefficiency on already suffering masses of the country. He made it clear that subsidy withdrawal and consequent domestic fuel price increase would only be an acceptable topic if local refining is optimized.

He also pointed at the need to drive greater level of transparency and convincing resource accountability as the basis for winning the trust of the people.

Osifo, who is also the president of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), noted that the downstream sector had not achieved its potential due to the thorny issue of petrol subsidy.

He said apart from communicating with the people to create an attitudinal change, the government must lead by example by cutting out wastage and making sacrifices that would help Nigeria overcome its economic challenges.

“The Presidency should come out and say that they are reducing their budget. The National Assembly also needs to do so. That is leading by example.

“Nigerians are not really averse to the subsidy removal but the government must be ready to demonstrate not just by talking but by doing and by acting.

“The government must demonstrate that if subsidy must go, this must reflect in our education, it must reflect in our healthcare and also our level of infrastructure. So, the trust deficit that Nigerians have must be addressed before we can make any progress,” Osifo said.

On the topic of the session- “Energy Transition, PIA, Petroleum Pricing and the Way Forward for the Downstream Sector”- Comrade Osifo noted that Nigerians are currently concerned about affordable and reliable energy.

However, Mr Olumide Adeosun, Chairman, Major Oil Marketers Association of Nigeria (MOMAN), called for a phased removal of PMS subsidy to mitigate its impact on ordinary Nigerians.

Adeosun, who was represented by Mr Clement Isong, Executive Secretary, MOMAN, said the N5 trillion subsidy payment by the government was unsustainable and putting a huge strain on the nation’s forex reserves.

He said the best option was to fully deregulate the sector and allow market forces to determine the price while also investing the subsidy gains in other critical areas such as mass transportation, healthcare and education.

Similarly, Dr Gabriel Ogbechie, Group Managing Director, Rainoil Ltd., said the global average price currently for PMS was N516 per litre, which was way higher than the N175 per litre it was being sold in Nigeria.

Ogbechie said the government should not only deregulate but also initiate a petrol tax to fund maintenance and construction of critical infrastructure across the country.

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