Akinlaja: Lawmakers Lack Information on Cost of Subsidy


Shola Oyeyipo in Abuja

Former General Secretary of Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) and Chairman, House of Representatives Committee on Petroleum Resources (Downstream), Hon. Joseph Akinlaja, has said since there is no appropriation for petroleum subsidy in the National Assembly, lawmakers have no information on how much Nigeria is spending on it.

Worried that Nigeria and some other countries still subsidising fuel for domestic consumption have spent about $5.2 trillion globally from 2015 till date on the policy, the International Monetary Fund (IMF) President, Christine Lagarde, had said at the recent World Bank/IMF Spring Meeting in Washington DC, United States, that subsidy removal would help boost revenue and improve local infrastructure development.

But when fielding questions from journalists on the advice, particularly on how much the country is expending on fuel subsidy, Akinlaja, who is the Grand Patron and Technical Consultant to tanker drivers in Nigeria, said he lacked information on how much is being spent on subsidy.

According to him, “I cannot tell you how much is being paid for subsidy. We know that if the government had come to the parliament to ask for a specific amount, based on our specific consumption for the year for appropriation, we would have known; but if they had not come here, we cannot answer the question. It means that it is only the Nigerian Nation Petroleum Corporation (NNPC) and the Minister of Petroleum Resources that can answer such question.”

He however said Nigeria subsidises the price of fuel, stating that “as for the issue of subsidy, I believe that there is subsidy that is being paid in whatever name it is called. The executive is the one responsible for supply and distribution of petroleum products in Nigeria. The same executive said petrol especially should be sold for not more than N145 per litre, and the same government, specifically the NNPC, during fuel scarcity last year, said the landing cost was N171.50.

“If oil marketers are instructed not to sell more than N145 and the same government talks about N171.50 as the landing cost, who is paying for the N26.50? Somebody must be paying it. Definitely, it has to be the government.”

According to him, “As Chairman of the Committee on Downstream sector, when we took on the Ministry of Petroleum Resources, what we heard (from them) was ‘under recovery.’ What is ‘under recovery’? Somebody is paying for something. So I concluded in my mind as a knowledgeable person that the N145 per litre is being subsidised.”

On the suggestion by IMF, the lawmaker said: “IMF will talk to us in advisory capacity; they don’t run our government for us. It is the government that is supposed to take the decision. But as somebody who has been in the industry for more than 40 years, I believe that the issue of subsidy for petroleum products is outdated.

“Nigeria does not have the discipline to operate subsidy in whatever form. Subsidy is good for agriculture or any other product. I have been in the forefront for more than 20 years fighting against the removal of subsidy, believing that Nigerian Government or the people responsible will be like America, which we copy all the time, which subsidises agriculture.

“For farmers not to be out of business, if they produce in America, there are agencies to buy the produce from the farmers and preserve them, so that the farmer can produce next year. But here, it is the middlemen who are being subsidised in our Nigerian situation.”

While he noted that finding solution to the problem of subsidy would require political will and the understanding of the populace, Akinlaja stated that successive governments have delayed removing subsidy because of the fear of Nigerians who do not trust the leaders.

The lawmaker said: “Do you know that no government will touch subsidy? It’s like hot charcoal; nobody can hold it in his hand for too long. That is what deregulation of petroleum product has turned to. Every government is afraid to do it. Why? There is loss of confidence between the governed and the government.

“Where there is trust-where the people know that if you remove subsidy, you are going to use it for power for everybody within two years, they will follow and support you.”

Contrary to a December 2018 report by the NNPC that Nigerians consumed a total of 479 million litres of petrol from January 2018 to September 2018, representing an average of 53.2 million litres daily for nine months, Akinlaja said following his research, he found out that the country does not consume that much.

“In actual consumption, nobody can put his finger on it because it varies, but if you take the average of a year, then percolate downward to daily, we should not consume more than 34 to 40million litres a day,” he said.