Leon Usigbe reports on President Goodluck Jonathan's quest to maintain his policy of deregulation of the downstream sector of the petroleum industry in the face of opposition by the labour movements and civil society organisations.IT was like a bomb set off;unexpected but withreverberating consequences. The statement on New Year Day announcing the complete withdrawal of petrol subsidy issued by Petroleum Products Pricing and Regulatory agency (PPPRA) hit Nigerians like a blast, the feeling of which has become all too familiar to many people since the upsurge in the Boko Haram insurgency. The Federal Government had harped on the intention to deregulate the downstream sector of the petroleum industry and had indeed, for several months, commenced the placement of structures, including the lack of provision for petrol subsidy in the 2012 appropriation to make good that intention but because no date had been clearly expounded for the take off of the implementation. That was why it was a rude shock to Nigerians when the PPPRA came up with its statement informing all stakeholders of the commencement of formal removal of subsidy on Premium Motor Spirit (PMS).'By this announcement, the downstream sub-sector of the petroleum industry is hereby deregulated for PMS. Service providers in the sector are now to procure products and sell same in accordance with the indicative benchmark price to be published fortnightly and posted on the PPPRA website. Petroleum products marketers are to note that no one will be paid subsidy on PMS discharges after 1 January, 2012,' the agency decreed.The absence of an advertised effective take-off date angered Nigerians who believed that they were not sufficiently prepared for what hit them, even when government had not been seen to have put appropriate infrastructures in place to reduce the negative effects of the policy. The PPPRA move has since increased pressure of everyone concerned in the country with the presidency itself in the eye of the storm.President Goodluck Jonathan has never looked as bad as he appears today in the estimation of the Nigerian public. The massive support he obtained in an election that was considered free, fair and transparent appears to have been eroded on account of his implementation of the subsidy withdrawal initiative. Everywhere in the country and especially in the social media, he is mocked for his blandness and called upon to resign for his supposedly cluelessness on how to execute his mandate. In spite of all that, Jonathan is unwavering in his commitment to the complete deregulation of the downstream of the petroleum industry to free up about N1.3trillion for use in the stimulation of the economy.When adverse reactions started pouring in after the commencement of the subsidy withdrawal policy, the president summoned an emergency session of the Federal Executive Council (FEC) to explore ways to expedite action on the provision of palliatives to cushion its harsh effects, with government maintaining however that reinstating the subsidy would have grave consequences on the economy. At the end of the meeting, the council resolved, among others, to provide immediate succour with the procurement of 1600 diesel-powered 50 passengers and above capacity buses through a Public Private Partnership (PPP) N10billion revolving loan deal attracting five per cent interest and repayable within five years. The initiative, which is coming under Urban Mass Transit Programme, would see the buses distributed to credible transporters, including the Nigeria Labour Congress (NLC), the Trade Union Congress (TUC) and the National Association of Road Transport Owners (NARTO), among others, as government hopes to reduce the cost of transportation. The president also directed ministries, departments and agencies (MDAs) to pay January salary by the 20 of this month to alleviate suffering, while ordering the MDAs to fill existing vacancies in order to reduce the level of unemployment in the country.The Minister of Information, Labaran Maku, who stressed while briefing State House correspondents after the FEC meeting that the present harsh effects of the subsidy removal would be temporary, was the first to indicate that there was no going back on the decision to deregulate as he pointed out that 'having taken this plunge, to go back will be to cripple the economy.' He added that 'in no time, the prices of (of goods and services) will come down. Unlike in the past where marketers used to hoard fuel because government was subsidising, that would no longer be the case. The customer will be king now because if they don't sell, they won't recover their money.'The organised labour has been screaming blue murder since the policy came into effect, but the Federal Government has maintained that it had taken labour leaders into confidence in every step of the way as far as deregulation is concerned. Special Adviser to the President on Media and Publicity, Dr Reuben Abati, who stated this position, also told State House correspondents that rather than shutting down the country as they are threatening, Labour should keep to their promise of supporting government over policies initiated in the interest of the people. 'I hold that Labour will hold on to its promise that it will support whatever government does in the interest of the Nigerian people because Labour was consulted. I attended those meetings with Labour and I know that at that meeting there were clearly some understandings reached,' he said.Governors Gabriel Suswam and Jonah Jang of Benue and Plateau states, respectively, were some of the state chief executives who personally spoke out about the desirability of the withdrawal of petrol subsidy following the Nigeria Governors' Forum (NGF) endorsement of the move. Both of them were in the State House last week where they rationalised the initiative as a way to revive the economy, provide necessary infrastructure and jobs for the teeming unemployed youths. Suswam said Benue State, for instance, could be getting extra N6.7billion from the subsidy proceed to enable it to provide more infrastructure, saying that the Federal Government was determined to ensure judicious use of proceeds from the subsidy removal and therefore appealed to labour to shelve its planned strike. 'It is a drop in the ocean but it will make a difference. If I decide that, that N7.6billion is going to build classrooms, I can achieve that. That subsidy now goes to the common man who ordinarily has never benefited from subsidy,' he said.Suswam observed that the President 'genuinely and sincerely' promised that whatever money that would be realised from savings would be invested in improving the living standards of Nigerians and therefore requested that Jonathan be given a chance. 'If we take it that over the years, promises have been made and that promises have been broken, therefore no chance should be given to any leader, then we are heading towards doom,' the Benue governor stated.On his part, Jang thought that the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC), which have to called out workers to go on strike over the removal of petrol subsidy, were not motivated by national interest. He said, rather than call a strike, what they should be concerned with was the proper utilisation of the proceeds from the subsidy withdrawal. The Plateau governor decried the tendency of Nigerians to want everything provided free of charge and reiterated that, as a popularly elected president, Jonathan would not want to do anything that would make him unpopular.Jonathan himself justified the deregulation as a necessary change Nigeria must make for government to make a significant impact in the lives of citizens as he told visiting Professor Jeffrey Sachs, Special Adviser to the United Nations' Secretary General, at the State House, that the country's 2010 capital budget was funded with borrowed money, the equivalent of which was used to fund the subsidy last year to him, 'no meaningful infrastructural development is possible in such an environment.'The president reiterated that his administration was committed to making significant and enduring interventions in the areas of power generation and supply, roads, railways, capacity building and health, as he pointed out that these sectors have already been opened to private sector participation. Prof. Sachs thought the president's decision to withdraw petroleum subsidy was 'a bold and correct policy,' adding that funds so released would go a long way to rapid infrastructural development and the health sector.In order to reinforce their support for the initiative, governors of the 36 states of the federation met with the president in the State House at the end of which they declared that there was no alternative to deregulation of the downstream of petroleum industry if the future of the country was to be guaranteed. They had deliberated on palliatives to cushion the effects of the removal of petrol subsidy. Chairman of the NGF, who is the governor of Rivers State, Rotimi Amaechi, explained to State House correspondents later that the state chief executives supported the subsidy removal because they believed that it would enable government to provide better for the people. He revealed that governors agreed with the president on the necessity to press ahead with the removal of fuel subsidy and engage private sector transporters with infrastructure to run intra and inter state mass transit scheme. They also agreed to focus on job and wealth creation through the revitalisation and mechanisation of agriculture to guarantee food security in the country. Amaechi, who insisted that the policy of deregulation has come to stay, added that the governors would work together to cushion the effects of deregulation and apply the proceeds in the interest of the people.That has done little to reduce or mitigate the anger against Jonathan who was compelled to address the nation for the second time in a week last Saturday. The first being on the state of emergency that he decided to impose on 15 local government areas across four states over the unrelenting Boko Haram bomb attacks and the second, dedicated mainly to addressing the issue of deregulation.In an apparent bid to convince Nigerians that he was determined to lead by example, he revealed the decision of his government to initiate cost-cutting measures in his administration including the reduction by 25 per cent of the basic salaries of political office holders for 2012. He directed all ministries, departments and agencies (MDAs) to reduce their overhead expenses. While justifying the removal of petrol subsidy, he told Nigerians that he felt their pains which he believed would be temporary. The president described deregulation as necessary for the sake of the future of the country and assured that government has also began the process of reviewing the number of committees, commissions and agencies with overlapping responsibilities. He said: 'to save Nigeria, we must all be prepared to make sacrifices. On the part of government, we are taking several measures aimed at cutting the size and cost of governance, including on-going and continuous effort to reduce the size of our recurrent expenditure and increase capital spending. In this regard, I have directed that overseas travels by all political office holders, including the president, should be reduced to the barest minimum. The size of delegations on foreign trips will also be drastically reduced; only trips that are absolutely necessary will be approved.'Arguing for deregulation, the president wondered: 'Should we continue to do things the same way and face more serious economic challenges' Or deregulate, endure the initial discomfort and reap better benefits later' I want to assure every Nigerian that whatever pain you may feel at the moment, will be temporary. The interest of the ordinary people of this country will always remain topmost in my priorities as a leader. I remain passionately committed to achieving significant and enduring improvements in our economy that will lead to sustained improvement in the lives of our people.'He said that government was greatly concerned about the issue of corruption, adding that the deregulation policy was the strongest measure to tackle the challenge in the downstream sector. He said that in order to address the immediate challenges that have been identified, he had also directed all MDAs to embark immediately on all projects which have been designed to cushion the impact of the subsidy removal in the short, medium and long-term, as outlined in the Subsidy Reinvestment and Empowerment Programme Document.Jonathan empathised with the people, noting that since the announcement, there have been mixed reactions to the policy. According to him, 'if I were not here to lead the process of national renewal, if I were in your shoes at this moment, I probably would have reacted in the same manner as some of our compatriots, or hold the same critical views about government. But I need to use this opportunity as your president to address Nigerians on the realities on the ground, and why we chose to act as we did. I know that these are not easy times. But tough choices have to be made to safeguard the economy and our collective survival as a nation.'While Jonathan's disposition suggests that he is determined to carry through the implementation of the deregulation policy as a desirable thing for the country at this time, it is unclear how far the pressure being applied mainly by labour and civil society organisations would influence his direction in the days and weeks to come. What cannot not be disputed however is that whichever direction he decides to go, the nation is in for a rough time.
Click here to read full news..
