Fuel subsidy is gone! Where is the money, Nigerians ask


*Fuel dispenser nozzle.

Mkpoikana Udoma

Port Harcourt — Amid the strangulating economic situation in the country and the concomitant face-off between the federal government and the organized labour, Nigerians have begun to ask how much the government has saved from fuel subsidy removal in the last nine months.

President Bola Tinubu during a nationwide broadcast on 31st July 2023 said N1trillion had been saved from fuel subsidy in two months, which means the Government has saved over N4trillion from subsidy in the last nine months from subsidy.

With inflation rate standing high at 29.9percent as at February 2024, according to the National Bureau of Statistics; organized labour made up of the Trade Union Congress, TUC, and the Nigerian Labour Congress, NLC, have continued to be at loggerheads with government over 15 points demands, which according to them would ameliorate the plight of the masses.

Demands by organized labour
Arising from the removal of fuel subsidy by the Federal Government and the resultant increase in the price of the commodity, NLC and TUC have issued several strike notices to the Government and had carried out a peaceful protest walk on two occasions.

On October 2nd 2023, the Government had convened a meeting with executives of the organized labour and reached a 15 points agreement, documented and signed by both parties as a memorandum of understanding.

Signing the MoU on behalf of the Government were Minister of Labour and Employment, Simon Lalong; Minister of Information and National Orientation, Mohammed Idris; and Minister of State for Labour and Employment, Nkiru Onyejeocha; while the TUC President, Festus Osifo and NLC President Joe Ajaero signed for the organized labour.

A copy of the MoU sighted by SweetCrude Reports showed that amongst the things agreed by the two parties include suspension of VAT on diesel for six months starting from October 2023, provision of CNG buses for mass transit across the nation, wage award of N35,000 to all federal workers beginning from September 2023 pending when a new national minimum wage is signed into law.

Others are, “a minimum wage committee to be inaugurated within one month after the agreement; Provisions of 55,000 CNG conversion kits to kick start an auto gas conversion programme, whilst work is ongoing on state-of-the-art CNG stations nationwide with pilot phase in November 2023.

“Implementation of various tax incentive measures for private sector and the general public. Settlement of crisis rocking the NURTW and RTEAN, in line with relevant ILO Conventions and Nigerian Labour Acts before October 13 2023.

“Payment of outstanding salaries and wages of tertiary education workers in Federal-owned educational institutions. Payment of N25,000 per month for three months starting from October, 2023 to 15 million households, including vulnerable pensioners.

“Distribution of fertilizers at subsidized rates to farmers across the country. Prevailing on state, local governments and the private sector to implement wage award for their workers. Provision of funds for Micro and Small Scale Enterprises as announced by President.

“A joint visitation to the refineries to ascertain their rehabilitation status. All parties commit to abide by the dictates of social dialogue in all future engagements and the Memorandum to be filed with the relevant Court of competent jurisdiction within one week as consent judgment by the Federal Government.”

Which of these demands have been met or implemented?

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The government has not taken concrete steps to address these demands made by Labour, which aimed at addressing the impact of the removal of subsidies on the people, a failure of the government which has pushed the organizsd labour into frequent strike notices with the most recent warning strike held on February 27th 2024.

According to the TUC, majority of these agreements have not been met by the government as at the time of filing this report; for instance, on the issue of N35,000 wage award to federal government workers, only one month payment was made and thr payment stopped.

The Chairman of TUC in Rivers State, Comrade Ikechukwu Onyefuru, said the minimum wage committee which ought to have been inaugurated since November 2023 was only set up in February 2024, a delay which he said would further delay the implementation of a new minmum wage for Nigerian workers, as public hearing on new minimum wage ought to have held in December 2023 as agreed.

Onyefuru said the incumbent government thinks they were still in campaign mode, saying that the President forgot that governance began since May 29th 2024.

He said, “Value added tax on diesel has not been suspended. On N100billion earmarked for CNG buses, only promises have been made, nothing on ground. We have asked the government to show us documents to prove that they’ve purchase CNG buses, but to no avail.

“On tax incentives, they haven’t done anything. In fact, they have even burdened the populace with more taxes and forced us all to pay more taxes. The crises in RTEAN was only resolved last week, the crisis in NURTW has not been resolved.

“The issue of payment of outstanding salaries and wages of tertiary education workers in Federal-owned educational institutions has not been addressed. N25,000 payment to 15million households is beclouded in uncertainties. No poor Nigerian has been paid. Subsidized fertilizers to farmers, not done.

“Wage award by state and private sector, only 20percents of State governors have complied. On funds for MSMEs, this one has remain a political promise, nothing on ground. The federal government is deliberately provoking the union. The union is abiding in dialogue, but the Government is not. The government has deliberately refused to register the agreement in court, cause if they do, they will be committing contempt.”

How much has the FG saved from subsidy removal since June last year till date?

The TUC has challenged the federal government to open their books and show Nigerians how much has been saved from subsidy in the last nine months, urging the presidency to wake up from politicking.

Onyefuru noted that the government last year announced that N400billion was saved monthly from fuel subsidy,

“If we judge them by their own words, N400billion multiply by nine months is over N3.6trillion, so where is the money? How and where is the money being applied? Is it on the health sector or road infrastructure? I challenge you journalists to ask the Government where they’ve applied the fuel subsidy savings.

“Nigerians should not expect any miracle, even if the refineries start working today. Where will they get crude oil from? Dangote refinery is going to US to import crude oil. The government should wake up. They should know we’re no longer in campaign period. Ukraine, a country at war, is today supplying grains to Nigeria because there is hunger in the land.

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“Politics is different from governance. We should tell ourselves the truth, we must put square pegs in square holes. Technocrats should be appointed into sensitive offices like CBN, we have qualified hands everywhere. Go outside the country, Nigerians are doing great, why can’t we get the right people to run the affairs of our country?

“The cost of governance gets me angry. Until we remove tribal sentiments and political settlement, good governance will elude us. The government owe us a duty to give us good governance.”

Similarly , an industry analyst, environmentalist and social commentator, Mr Fyneface Dumnamene Fyneface, said the government that must have saved over N4 trillion as at March 2024, owing to the series of announcements by the federal government on fuel subsidy savings.

“In November 2023, the federal government said they had saved N1.45trillion between June and September, which is three months. Thus, if N1.45trillion is saved every three months, then, by March 2024, the government should have saved and be in possession of at least N4.4trillion.

“More so, in January 2024, the Presidential Fiscal Policy and Task Reforms Committee, through its chairman, Taiwo Oyedele, said the federal government has saved N8trillion under the President Tinubu administration from subsidy. Thus, the government has made some good savings and is in possession of some good amount of money that is relatively sufficient for use to address issues relating to subsidy removal raised by Labour to ameliorate the sufferings of the people and avert incessant strike actions by the organized labour.”

Fyneface who is also the Executive Director of YEAC-Nigeria, noted that it was recently reported that the government was supporting each states by allocating more funds to state governors to cushion the biting hardship in the country.

“In terms of possible usage of the subsidy savings, a report was received in the media about how the federal government was supporting each state with N5 billion, and also plans to transfer N8,000 to 12 million poor households for six months, and sharing more money as federal allocation to states and council areas monthly while keeping the rest in their coffers, among others.”

However, a former chairman of Independent Petroleum Marketers Association of Nigeria, IPMAN in Rivers State, Dr Joseph Obele, says there is no money anywhere as fuel subsidy savings, since subsidy payment was done with crude oil swap.

Obele noted that the government was spending over N280billion on subsidy payment, said the way forward is for the Government to stop fuel importation in order for the nation’s refineries to work.

“Subsidy payment was done from crude oil swap not with cash. There was no time Nigeria was paying cash for fuel subsidy. So there is no money anywhere as fuel subsidy savings because it wasn’t cash.

“The way forward is for the Government to set a deadline to end fuel importation, like say December 2024. As long as there is no political will to end fuel importation, there will always be a problem, because those benefiting from fuel importation and backdoor subsidy will never want it to end.”



This article was originally posted at sweetcrudereports.com

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