Fuel Subsidy Removal: The Challenge Before House Committee on Petroleum Downstream
The recently constituted House Committee on Petroleum (Downstream) chaired by Hon. Dakuku Adol Peterside is faced with the onerous task of helping the 7th National Assembly take a stand on the removal of fuel subsidy which has become a most contentious issue engulfing the nation’s political landscape.
The history of the fuel subsidy in Nigerian dates back to April 1992 when Ibrahim Babangida government raised the price of a liter of fuel from 15.3 kobo to 20 kobo. He did it again on March 31 1986, from 20k to 39.5k, on April 10 1988, from 39.5k to 42k. On January 1, 1989, he increased the price from 42k to 60k (although the regime said it was for private vehicles only, but the price remained 42k for commercial vehicles). On December 19, 1989, it moved to a uniform price of 60k. On March 6, 1991, the price of a liter of fuel was increased from 60k to 70k and that was the price when he stepped aside in August 1993.
Chief Ernest Shonekan increased the price of a liter of fuel from 70k to N5 on November 8, 1993 but a hectic mass protest, saw Abacha take over power. The incoming Abacha regime reduced the increment to N3.25 on November 22, 1993. On October 2nd 1994, the Abacha junta increased the price of fuel to N15, from N3.25 but after massive street protests, the regime reduced the increment to N11 on October 4, 1994. That was the price till Abacha passed on and the Abdulsalami Abubakar caretaker regime raised the price from N11 to N25 on December 20 1998 and after days of sustained protests, it was forced to reduce the increment to N20 on January 6, 1999.
The Obasanjo’s presidency adopted fuel subsidy as the bedrock of its economic policy, for no sooner than it was sworn in than it effected an increment to N30 on June 1, 2000 but protests and mass rejection forced it to reduce the increment to N25 on June 8, 2000 and further down to N22 on June 13, 2000. The regime was again to increase the price to N26 on January 1, 2002 and again to N40 on June 23, 2003. He was to raise it up to N70 by the time he left in May 2009 but the incoming Yar’Adua regime reduced it to N65, after general protest against the new price regime.
Although, the Yar’Adua government made efforts to increase the price of petroleum products it could not scale through following increased mass disapproval for such act.
The Goodluck Jonathan administration has said it is fuel subsidy removal or nothing. If this policy scales through the administration claims it is going to save the nation N1.3 trillion annually which the government argues it is going to channel into infrastructural development. It also argues that fuel subsidy removal is going to open up the supply and distribution of petroleum products to the forces of demand and supply. Others argue that if our refineries are functioning optimally the issue of fuel subsidy will not arise.
Hon. Dakuku Adol Peterside is worried that the issue is unnecessarily heating up the polity and he is condemned to guiding the House of Representatives to making informed decisions on the issue rather than follow popular opinion. He has proposed a one-day stakeholders roundtable to hear all shades of opinion from the major players in the downstream sector which will lay bare the truth, myth and the reality of deregulation and whose interest deregulation hopes to serve and why.
The decision has so far received wide spread applause from stakeholders as they say it is necessary and well timed.
Observers have also hailed the Speaker, Hon. Aminu Tambuwal and the leadership of the House for appointing Hon. Dakuku Peterside as the Chairman of Committee on Petroleum (Downstream), saying it is putting a square peg in a square hole especially going by his decision to call for a stakeholder’s roundtable at the first instance, which the Speaker in his wisdom has approved.
The Rivers born politician, a former Commissioner for Works has a whole lot of other professionals as members of his committee including a onetime President of NUPENG, Hon. Peter Akpatason.
Some of the participants expected at the proposed stakeholders roundtable include; Ministry of Petroleum, Nigerian National Petroleum Corporation (NNPC), Petroleum Products Pricing Regulatory Agency (PPPRA), Department of Petroleum Resources (DPR), Major Marketers Association of Nigeria (MOMAN), Nigeria Labour Congress (NLC). Others are Trade Union Congress (TUC), Academic Staff Union of Universities (ASUU), National Union of Petroleum and Natural Gas Workers (NUPENG), Petroleum and Natural Gas Senior Staff Association (PENGASSAN), National Union of Road Transport Workers (NURTW), and National Association of Nigerian Students (NANS).
