Total fuel subsidy removal is a must – Jonathan

President Goodluck Jonathan

President Goodluck Jonathan on Thursday launched a fresh campaign to totally remove the subsidy on fuel, barely a year after a similar campaign and forceful removal of subsidy almost brought the country to a standstill.

Jonathan said only the total removal of subsidy on petroleum products would attract investors to the oil sector and put an end to the importation of petroleum products as it is currently being done.

About this time last year, the President, in his budget estimates submitted to the Senate, proposed total removal of subsidy on petroleum products and in spite of public protests removed subsidy on January 1, 2012.

The President’s action was greeted by spontaneous protests among the citizens.

A mass action coordinated by civil society groups paralysed activities in the country for about two weeks until the government backpedalled and announced a partial removal. Per litre pump price of petrol was consequently reduced to N97 from the initial N141 under the zero-subsidy regime.

The pump price of the product pre-January 1, 2012 was N65.

Jonathan started the fresh campaign to totally remove subsidy while receiving the report of the graduating participants of the Senior Executive Course 34, 2012, of the National Institute of Policy and Strategic Studies, Kuru, near Jos, at the Presidential Villa, Abuja.

“Why is it that people are not building refineries in Nigeria despite that it is a big business? It is because of the policy of subsidy, and that is why we want to get out of it,” the President said.

Like the President did late last year, he argued that while the total removal of subsidy could be painful to Nigerians he said they would be happier at the end if they could bear the initial pains.

Jonathan said, “To change a nation is like surgery. If you have a young daughter of five years who has a boil at a very strategic part of the face, you either as a parent leave that boil because the young girl will cry or you take the girl to the surgeon.

“So you have the option of just robbing metholatum on the face until the boil will burst and disfigure her face or you take that child to the surgeon. On the sighting of a scalpel of the surgeon alone, the child will start crying.

“But if she bears the pains and do the incision and treat it, after some days or weeks, the child will grow up to be a beautiful lady.

“There are certain decisions that government must take that may be painful at the beginning and people must be properly informed so that they will be ready to bear the pains.”

Jonathan said he believed that Nigeria could witness a turn-around within 10 years once the right policies were put in place.

“I believe that you do not need a lifetime to change a nation. Under 10 years, Nigeria can change and people will not even believe that this is Nigeria again. Immediately you come up with strong policies in key sectors of the economy and keep it for 10 years, the change will be astronomical,” he said.

He said Canada had 16 functional refineries and Nigeria has four that are struggling to refine at 30 per cent of installed capacity because all the refineries in Canada are privately-owned.

In the aftermath of the January protests and in the desire to assuage ill feeling of citizens over large scale corruption in the oil sector, Jonathan had promised to probe the sector.

The probe committee set up by the House of Representatives subsequently found that oil thieves had defrauded the country of N1.7trn under the fuel subsidy regime. Many suspects, including a son of the chairman of the Peoples Democratic Party, Mahmud Tukur, and children of other notable Nigerians and their companies, are currently on trial for making claims for fuel not imported.

Curiously, the nation has been suffering from acute shortage of fuel for almost two months with filling stations selling, unofficially, at between N100 and N150 per litre.

The situation has also made critics to submit that the shortage, notwithstanding official explanations, might be a design by the government to surreptitiously increase fuel pump price in the new year.