TO some keen watchers of the polity, there's apparent lack-lustre approach by government and some other stakeholders to the fuel subsidy controversy. To other more critical respondents, government's insistence on removing the subsidy without reaching any consensus other than the Governors' Forum's hypocritical approach is undemocratic.Consequently, a peace and industrial harmony group has canvassed 'a different approach' to the volatile issue that can destroy the 12-yearA document released by Initiative for Peace and Industrial Harmony (IPIH) to the media in Abuja urges all the negotiators, especially the government and the unions to note that 'the subsidy issue must be negotiated' to avoid what it calls post-deregulation crisis.On the need to adopt a different approach from the near-monologue that has been noticed, the organization notes that, 'subsidizing fuels has high costs. Moreover, universal price subsidies almost always benefit high-income households more than the poor, because richer households consume more energy. Other adverse consequences include rampant abuses in fuel markets and an inefficient downstream sector.'According to the document signed the executive director of IPIH, Dr. Timiebi Kiropamo-Agary, retired federal permanent secretary, 'to pay for subsidies, governments often borrow to raise additional revenue from other sources, or reduce spending on other public goods, which is the situation in Nigeria.''If the subsidy is used to stabilize or lower final prices, the tendency exists that the products would be smuggled to other countries and sold at market rates, thus leading to a double loss for government.'It argues that for economies that export oil, but charge less for it in the domestic markets, the domestic subsidies are implicit; they have no direct budgetary impact so as long as the price covers the cost of production.'The subsidy, in this case, is the opportunity cost of pricing domestic energy below international market levels, i.e., the rent that could be recovered if consumers paid world prices, adjusting for differences in variables such as transportation costs,' it says.While the group notes that, 'most Nigerians have lost count of the number of times the country has had to go on strike to protest increases in price of fuel,' it stresses that 'the question that keeps coming to mind is why must we always follow the same predictable and costly pattern''The group fears that unless government and other stakeholders move fast in concluding negotiations, there will be a repeat of the old method of managing negotiated settlements where there has always been collateral damage. This is its argument:'A quick glance at this history indicates clearly that Nigeria has lost productive time and resources through strikes. Unfortunately, the cycle may be repeated with the current scenario. The first chain in the cycle, i.e., announcement, has been accomplished. The second chain, opposition by Nigerian trade unions and other groups, has also been expressed..'From all indications, as things are and based on past experiences, it will grow into ultimatum and possibly strikes, completing the second and third chain by next year when the policy is scheduled to come into effect.'As the group queries: 'Has the time not come to move from the vicious circle of price increase-strikes-negotiations' The cost of strikes to the economy is simply too high, especially as government in the end always seems to get away with price increases. This means that the fuel subsidy issue must be negotiated.'All stakeholders ' government, labour unions, civil society and the organized private sector ' must come together to find a negotiated solution to the issues.'Considering the unstable security situation in Nigeria, any form of strike has the potential to result in far more serious social unrest. This apparent conclusion is that the time has come to engage constructively to achieve mutual objectives.'The IPIH says it has studied several strikes and demonstrations against fuel price increases and comes out with one clear fact: today, despite all the strike actions, Nigerians pay more for fuel than they did a few years, ago, but got nothing in return.The group says instead of the rigid stance of government, it should include incentives in its discussion with the people in the manner of the Abacha-Labour Union's in those days that led to the formation of Petroleum Trust Fund (PTF).'Our experiences tell us that we should be considering a different approach,' the document says. 'We should be engaged in a Post-Deregulation Initiative, which should include the introduction of Fuel Fund for infrastructural development; provision of urban mass transit systems; expansion of the federal highways; rural road development; creation of a modern railway network development and the establishment of a Deregulation Impact Mitigation Fund.'However, the document asserts that, 'in the final analysis, Nigerians have a right to mass action to push for justice. But what would be the point of going to war unarmed, or armed with false intelligence' By engaging government with facts, figures and information about the subsidy process and the oil cabal, we stand a better chance of winning the war on several fronts without even embarking on strike action.'That way, Nigeria and Nigerians will emerge winners. The Initiative for Peace and Industrial Harmony invites you to join hands in this new approach.'ON confronting the so-called 'oil cabal', the document notes that,'it is a mark of how far off the real debate we are that the identity of the companies that benefit from the petroleum products subsidy have remained largely shielded from public scrutiny until now.''But how can we get to the facts and figures if we do not know, which companies are engaged in the import of the subsidized products' Which criteria were used to select them' Are the companies in any way related to public officials' Indeed, who are the 'oil cabal'''The group recalls that the Joint Committees on Petroleum Downstream, Finance and Appropriation of the Senate was, on December 2, 2011 told that about 100 companies shared about N3.655 trillion meant for petroleum subsidy in the last five years, as excerpted below:'Oando Nigeria Plc (N228.506bn) 'Integrated Oil and Gas Plc (N30bn) 'MRS (N224.818bn) 'ConOil(N37.96bn) 'Enak Oil & Gas (N19.684bn) 'Bovas & Co. Nig. Ltd (N5.685bn) 'Obat (N85bn) 'AP (N104.5bn) ' Folawiyo Oil (N113.3bn) 'IPMAN Investment Limited(N10.9bn) 'ACON (N24.1bn) 'Atio Oil (N64.4bn) 'AMP (N11.4bn) 'Honeywell(N12.2bn) 'Emac Oil(N19.2bn) 'D. Jones Oil (N14.8bn) 'Capital Oil(N22.4bn) 'A-Z Oil(N18.613bn) 'Eternal Oil (N5.57bn) 'Dozil Oil (N3.375bn) 'Fort Oil (N8.582bn).The group also recalls that the Senate demanded to know the cost of locally refined petroleum products as against imported fuel and whether there was subsidy on locally refined products; the Group Managing-Director of the NNPC, Austin Oniwon, said that it cost between $4 and $5, depending on the exchange rate, to refine a barrel of oil, which is equivalent to 159 litres.Oniwon added that locally refined products equally attracted subsidy, but at a reduced rate when compared to imported products.According to Oniwon: 'We (NNPC) collect subsidy on locally refined products but it is less than what we collect on imported product. But since we do not include trade marking and other charges on imported products, it costs N11.87 less on locally refined products and N11.87 more on imported ones.'This is an indication that the NNPC makes more money on imported products than from the locally produced ones, the group notes, highlighting that, 'there were also conflicts in sums involved in the subsidy.''The sum of N1.348 trillion was said to have been spent on subsidy by the Petroleum Product Pricing Regulatory Agency, PPPRA from January to August 2011. The figure contradicted the N1.426 trillion submitted by the NNPC, as subsidy on the products as at August 2011.'In all, according to the PPPRA Executive Director, Reginald Stanley, the gross amount spent on fuel subsidy from 2006 to September 2011 stood at N3.655 trillion.'Meanwhile, The Guardian gathered last night that there had been concerns in various quarters that government was not making steady progress in any communications strategy on the subsidy removal campaign.Besides, government seems to have gagged its officials from talking about fuel subsidy, as a an attempt made by the Petroleum Resources Minister to talk about it in Perth, Australia, nearly resulted in some rupture in relationship with the President, who reportedly rebuked her for speaking to the press about the January date possible shift.It was understood last night that all sorts of meetings suggested and scheduled from November 1 to November 24 were bungled by government officials, including the Labour Minister, 'who seems to be acting under instruction that they should not talk to the people and stakeholders, as the fuel subsidy removal is a done deal, sealed and signed with the governors.
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