As NPAN Stokes DebateTHE Newspapers Proprietors Association of Nigeria (NPAN) last Thursday, at the MUSON Centre, Onikan Lagos, set the stage for what would have become a volatile debate, had NPAN President, Mr. Nduka Obaigbgena, not wisely taken charge from the beginning.It was a meeting of government agents, civil society, professionals, and market men/women and it was attended by Group Managing Director of the Nigeria National Petroleum Corporation (NNPC), Austen Oniwon, and representatives of the Petroleum Products Pricing Agency (PPPRA) and related agencies, which received some spanking for the country's subsidy woes.The topic ' 'Removal of Fuel Subsidy: In whose Interest'' ' was as insightful as it was sensitive.Veteran journalist, Isa Ismaila, had informed the 'charged' audience that 'Nduka' would 'roll out the rules of engagement' for the town hall meeting.There was an uneasy calm in the hall; and one could feel the tension in the air. The 'mixed multitude' had already started an informal debate, howbeit in hushed tones within the audience.To speak in favour of the 'motion' were Finance Minister, who also co-ordinates the Economy, Dr. Ngozi Okonjo-Iweala, her counterpart at the Petroleum Resources Ministry, Mrs. Diezani Alison-Madueke, and Central Bank Governor Mallam Sanusi Lamido Sanusi.On the other side of the divide to canvass retention of subsidy for petroleum products were former President of the Nigeria Bar Association (NBA), Olisa Agbakoba; human rights activist and legal practitioner, Femi Falana; former DG of the Nigeria Television Authority (NTA) and Chairman, Silverbird Group, Ben Bruce; and Vice President of the Nigeria Labour Congress (NLC), Issa Aremu, who was described as the brain box of the labour movement.Chief Segun Osoba, who Obaigbena referred to as the doyen of the media, and frontline newspaper publisher, Mr. Sam Amuka, were not lost in the audience, just as eminent NPAN members ' Mohammed Haruna, Frank Aigbogun, John Momoh and Nosa Igiebor ' were on the neutral side of the podium as the war raged on.'Battle-scarred' Ray Ekpo also had his gaze fixed on the show.Obaigbena pointed out that Alhaji Aliko Dangote, who was sitting side-by side with Femi Otedola on the front row, would be leading the observer team for the debate. He was right. Neither Dangote nor Otedola made practical contributions yet, as a vociferous 'inactive participant' in the crowd said, their presence spoke volumes for the conference.Sensing the vaulting interest in the subject matter from the debaters and their audience, the NPAN President gave a word of caution: 'No unbecoming words should be used here; and each speaker (with the exception of the opening speaker (the Finance Minister) that will set the tone for the debate in 15 minutes) has got three minutes.'But, just as it is difficult to enforce the extant laws in the oil and gas sector, including those meant to curtail excesses of the so-called cabal in fuel subsidy, Obaigbena had an uphill task getting the speakers to keep to the timelines.The extent to which participants stuck to the rule, particularly during the question-and-answer session, is a matter of conjecture, as it took Obaigbena's intervention to keep the spirit of the game.Each of the speakers, except TUC president, Peter Esele, violated the golden rule and spoke much longer than was 'absolutely necessary.' As Esele put it, he had to 'defer to the MC,' even though the audience wanted him 'to carry on'.However, before the debate actually commenced, Obaigbena took his time to introduce the debaters as well as explain the core essence of the gathering, which is to forge understanding around the whole concept of subsidy removal and to get feedback from the people.Indeed, the NNPC received a lot of spanking from participants. Running across the entire argument is the fact that the Corporation has not only operated below capacity and expectation of Nigerians but also contracted debts and made far-reaching commitments on behalf of the economy without any serious oversight from either the executive and legislative arms of government.Esele, who arrived late at the meeting due to flight delay, was the last to mount the podium.Speaking in the concluding part of the meeting, the TUC leader said: 'The TUC has never come out to say no to deregulation. Our position is that there are some conditions that government needs to put in place before embarking on the policy. We are saying that the NNPC is opaque and until government unbundles NNPC to make it run like a business, the oil sector will continue to have problems.'An interesting shift was former Labour Leader, Adams Oshiomhole's support for subsidy removal. The Comrade Governor of Edo State, who arrived 30 minutes into the event, got the other side of the crowd, when he joined the like of Okonjo-Iweala, Sanusi and Alison-Madueke in insisting that fuel subsidy was not sustainable. The unusual jeers from the crowd forced him to explain that being close to the issue had offered him a much-deeper understanding of the subsidy crisis, hence his seemingly strange argument that Nigerians allow the removal.Oshiomhole also called on Nigerians to support President Goodluck Jonathan in the onerous task of steering the ship of the state aright.Okonjo-Iweala's 'Opener' Sets The StageASKED to set the tone for the debate in 15 minutes, Okonjo-Iweala assured her listeners that she would not engage semantics associated with efforts to win an argument but state the facts as they truly are.'My opener is not to talk about things to persuade (or not to persuade) you about fuel subsidy but to present the facts for you to make up your mind,' she said.But by the time she rounded off her presentation that lasted more than 20 minutes, it became clear that the debate had begun.For instance, the Minister of Finance first delved into the elementary definition of subsidy, which she illustrated with the payment of N65 per litre of petroleum in Nigeria, whereas the actual cost is much higher, depicting the fact that the government pays the difference. According to her, the price is not determined by the forces of demand and supply as obtainable in the telecommunications sector. Okonjo-Iweala, who put the landing cost of petrol at N123 per litre, said factoring in distribution costs and margins at N15.72 meant that altogether, petrol would be selling at N139 per litre. Should subsidy continue, Nigeria would have spent over N3.3 trillion on subsidy, which it could be forced to raise from the 'debt market.'Already, the country borrowed N852 billion, as domestic debt, to finance the 2011 budget.Giving a pinch of force and a bite, to what should have been an opener, the Minister also argued that deregulation had worked well for the telecommunications sector, which, prior to 2001 had only 400,000 lines but now boasts of over 80 million telephone lines, thanks to GSM revolution. She also made reference to the ease of transport in the aviation sector as opposed to the old deprived days of Nigeria Airways monopoly.Further to that, the Finance Minister noted that the Federal Government had the landing cost of petrol in 2012 at N104 per litre and explained that the subsidy being paid by government hovers between N73 and N74. Underscoring her argument that fuel subsidy would be unsustainable, shemade reference to the fact that diesel has, for some time now, been deregulated, meaning that there is limited intervention by government. She also pointed to the fact the deregulation entails free market entry and exit.According to Dr. Okonjo-Iweala, there are dangers associated with continuation of subsidy in the form it is being funded in Nigeria: it helps only the rich, not the poor; it encourages smuggling; it serves the interest of neighbouring countries to which the mal-subsidised products are diverted; it discourages private refiners, including local and foreign investors, who, ordinarily, would have moved into Nigeria to build refineries, and benefit only the marketersBut the Minister also gave a bombshell: Nigerians, as at today, consume nothing less than 35,000 litres of petrol every day! The figure emanating from the statistics, which she reeled out at the forum was seen by opponents of subsidy as one of those figures concocted in conjunction with the same subsidy cabal and inadvertently accepted in official quarters.Naturally, Ben Bruce, Olisa Agbakoba, and Femi Falana, 'arguing for the masses,' alongside NLC's Issa Aremu, kicked against the numbers; Oshiomhole also disagreed.Even CBN's Sanusi, a government agent, who was on the side of the Minister, faulted the figure in his subsequent submission, albeit more mildly.Sanusi, who made a very animated argument, said it would be wiser for the country to subsidise production rather than consumption. In his judgment, retention of fuel subsidy means an open cheque for consumption subsidization.The CBN Governor disclosed that, between January and November 2011, the total amount of forex demand at the Wholesale Dutch Auction System (WDAS) by oil marketers was $8 billion, while the total amount of fuel subsidy that was granted the marketers within the same period was $8 billion. 'If the Federal Government continues to subsidise' petroleum products, he said, 'the next government would face crisis.'Okonjo-Iweala also listed the gains of subsidy withdrawal to include robust infrastructure growth and other socio-economic advancements. She said Vice President Namadi Sambo would manage the safety net programme using the accruals from subsidy removal. She said the programme, apart from infrastructure building and development, would target rapid job creation and youth empowerment programmes in states, including urban mass transit, vocational training schemes, in collaboration with states, maternal and child care services, among others.Now That Govt Is Talking To Nigerians'Okonjo-Iweala's convincing presentation kicked off the debate; she was almost conclusive in her remarks. So, Mr. Agbakoba's response sailed from what appeared diplomatic argument to outright challenge.'What can we do to get things going' Conceptually, there is nothing wrong with subsidy or its removal. Government does not have the resources so has to look for new ways. Can we remove subsidy from petrol; is there generally a subsidy' Do we have to transfer state assets to private people' MTN is exporting everything to South Africa; so, how do I know that subsidy removal will benefit Nigerians''Agbakoba blamed the controversy trailing the subsidy issue on faulty information exchange.According to the lawyer, government is not showing any example, especially in the area of cutting costs. He said: 'If you want to put a burden on us, show us the one you are carrying. Government has not done anything for me since I was born. Let's not give subsidy a bad name; nobody is against subsidy removal but the information is missing. If you give us the framework, in my sector I can mobilise people to raise N7 trillion.There Has Always Been Subsidy ' Petroleum MinisterYES, there is subsidy and the Subsidy is real,' Alison-Madueke, on whose shoulders the debate rests, responded. She explained that government still subsidises crude oil that is delivered to the NNPC for refining, even as she expressed the concern that, although the price of kerosene is fixed at N50, it is sold for over N80 across the country.Responding to Agbakoba's claim that government had not done anything for him since he was born, the Minister urged him to give this government a chance to do something for him this time around. She argued that the right terminologyFor the Premium Motor Spirit (PMS), she said the product sells for N65 in urban centres, but goes for much more in many states, including Bayelsa, due to distribution costs. Saying that the government-run refineries ' Port Harcourt, Warri and Kaduna ' have not worked the way they should in the last 10 years, Alison-Madueke admitted that Turnaround Maintenance (TM) 'has been abused.'The Minister of Petroleum Resources emphasised that government had now invited the original builders to fix the refineries and that, beginning with that of Port Harcourt, the refineries would operate optimally within 24 months.Given Nigeria's peculiarities, she said, a private refinery needs to produce a minimum of 100,000 barrels a day to be profitable. To build a refinery of that capacity, the Minister said, an investor needs over $3 billion making it difficult for local investors.'Imagine what will happen when we open up the downstream sector. Already more than one million jobs are being created through what we are doing. Alison-Madueke argued that the government is actually courting subsidy transfer, not removal in a way that would benefit the poor in real terms.Issa Aremu, who commended the organisers of the town hall meeting, said the argument of market-driven subsidy is punctured by the fact that pump price of petrol did not crash at the time international price of crude oil crashed. He said the onus lies on government to assure Nigerians of the existence of the real need to remove fuel subsidy.Using the no-free-lunch philosophy, Comrade Oshiomhole argued that subsidy does not come free and should be paid for. Advising that individuals and audit firms, who append their signatures on documents that aid subsidy should be prosecuted, the Edo State Governor suggested that foreign audit firms should be used instead of local ones, which, according to him, have betrayed the trust reposed in them by Nigerians.Activist lawyer, Falana was particularly irked by what he described as Sanusi's general blame on Nigerians for corruption. Sanusi had, in the first round of his debate lamented corruption, which he said was endemic, and argued that the N1 trillion fuel subsidy was enough for smugglers and fuel diverters to bribe their way to neighbouring countries.But Falana said 'it is a fallacy of generalisation to blame all Nigerians for corruption when we know those that are corrupt. The former President Olusegun Obasanjo administration increased pump prices six times in eight years, what did we get at the end of the day' Nothing. I believe government has a problem and we all have a duty to help government.
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