The Federal Government must ensure the proceeds from the recent decision to remove subsidy on premium motor spirit (PMS), popularly called petrol, are utilized in a manner that the impact on the lives of the people is visible and sustainable, the Nigerian Extractive Industries Transparency Initiative (NEITI), has said.
The Executive Secretary of NEITI, Orji Ogbannanya Orji, said on Tuesday in Abuja at the end of the stakeholders’ validation workshop on the 2022 Annual Progress Report of the transparency and accountability agency that this would be the critical next step if the government was to sustain the impact of the reform initiatives by the Tinubu administration.
Orji, who commended Tinubu’s statement in his inaugural speech, said after the pronouncement on the removal of fuel subsidy, the President’s next steps in actualizing and sustaining the reforms in the oil and gas industry as well as ensuring the growth of the economy would be effective, transparent and accountable management of the proceeds.
He described the removal of subsidy on petrol as one bold reform in the oil and gas industry that would need to be sustained to enable the economy to grow.
The singular act of removing subsidy on petrol, he pointed out, would free a lot of resources for the government to deliver on a lot of other commitments to the people, in terms of the provision of infrastructure and amenities to boost the quality of life of Nigerians.
“For NEITI, the government has started well. We will continue to join forces with civil society, particularly the media, to highlight that now that subsidy on petrol consumption has been removed, the critical next step is for the government to put up a very robust arrangement to manage the proceeds or savings from the exercise in an accountable and transparent manner, to ensure that the decision reflected on the manner the resources are applied on the building the country’s socio-infrastructure, including roads, electricity, healthcare, jobs, security and improving the general well-being of Nigerians.
“Nigerian must be made to see the difference between when subsidy existed on the pricing template of petrol in the country and now that it has been removed,” he said.
To achieve these objectives, Orji said it would require robust planning by the government, based on competence, capacity, knowledge, information, and data as well as the prudent application of the resources to impact the quality of life of the people.
Also, the government, he said, should consider some short-term steps to cushion the immediate adverse effects of the removal of subsidy on petrol on the vulnerable and less-privileged poor segments of society spread across the working and non-working class, including the unemployed people.
“The impact of the subsidy removal on petrol consumption must reflect on the improvement of the general well-being of Nigerians as well as our social infrastructure in line with NEITI’s persistent and consistent demand for the removal of subsidy on petrol. There should not be any going back. We should move forward from there and consolidate on the gains,” he said.
Payment of subsidy of petrol, he continued, has put a lot of impediments to the achievement of transparency and accountability in the management of revenues from the operations of the oil and gas industry over the years.
On knowing the actual daily national consumption volume of petroleum products, which is intrinsic to the quest for transparency and accountability, the NEITI Chief said the general belief is that the removal of subsidy on petrol would throw up a lot of issues in the industry, particularly the actual consumption figures for petrol.
There has always been a dispute and debate on the actual consumption of petrol in the country. Each figure, between 45 and 66 million litres per day, varies according to various agencies involved in the petrol distribution and supply value chain as well as their respective purposes.
Orji said NEITI believes that these figures on the country’s daily consumption of petrol were not correct, hence the decision to commission a study to determine the actual PMS consumption figures based on empirical evidence and data.
“We have every reason to believe that the real figure will be far less than the country is being told. NEITI believes the removal of subsidy on petrol will remove all the incentives for hiking these figures in a manner that defies empirical logic and reason.”
Besides, he said the removal of subsidy was a fundamental policy shift by the government in the quest for reforms in the oil and gas industry, as it would remove the veil on opacity and suspicion in the management of petroleum products distribution and supply, which has largely been based on estimates.
On the dissolution of Federal Government Boards and Parastatals, Orji said as it affects NEITI, he would seek an audience with the relevant government authorities, including the Secretary to the Government of the Federation, to clarify and understand the issues and the next steps.
He said he has already briefed the international Secretariat of the EITI on the development and how it would affect the NEITI, adding that his concern would be to highlight to the government the urgency to resolve all grey areas, including the possibility of a waiver for the Board to be reinstated, in view of the ongoing EITI validation exercise on Nigeria.
On the importance of the Annual Progress Report, Orji explained that the exercise was strategic for the effective implementation of the EITI process in Nigeria, as it usually provided the opportunity for industry stakeholders, including players, policymakers, civil society and the media to review, appraise and report progress as well as highlight areas that need to be reviewed or sustained towards set national objectives of transparency and accountability in the extractive industry.
