Despite stiff opposition from organized labour and other prominent Nigerians, the Federal Government is forging ahead with its plan to phase out petroleum subsidies starting from January, 2012.The government has drafted a list of what it called 'Nigerians of high integrity' to form a committee that will be saddled with the responsibility of advising government and managing the gains of fuel subsidy removal.Petroleum Minister Diezani Alison-Madueke, who spoke about the government plans, declined to disclose the names of the committee members but said that the list was already before President Goodluck Jonathan for approval.She said, 'Government would handle the implementation of these benefits so that it would be open and transparent. As we speak, a committee of highly-respected Nigerians is being put together, who would monitor and advise.'She said the rationale behind the selection of the respected Nigerians to serve on the committee was to ensure that 'across the board the package is robust, monitored and advised on by Nigerians of high integrity so that it is clear that it is a credible and transparent process.'The minister, who spoke to some newsmen during the ongoing Commonwealth Business Forum in Perth, Australia, said that no date has been fixed for the planned removal, noting that a definite date would be fixed after extensive consultations with various stakeholders.She also explained that government opted for the removal of subsidies because all punitive measures put in place to curtail racketeering have failed to yield the desired result.She noted that the president has resolved to ensure that Nigerians enjoy full benefit of the subsidy removal.'It is has become pertinent that we find other ways to utilize the vast resources that are been channelled into the subsidy which are not reaching the masses. This time around, once we actually meet with the various stakeholders and agreed on a formula, setting major deregulatory benefits would be put on the table.'And there are major benefits that will cut across all major sectors of the economy. Some of them involve road works, major public maintenance work, other involves ongoing mass transportation, there are schemes for skilled youths and also schemes for unskilled youth and of course, there will be areas for maternity and child care etc. But we shall ensure that across the board the package is robust and monitored and advised on by Nigerians of high integrity so that it is clear that it is a credible and transparent process.'In the area of public works, we shall not go through the government channels as usual, as Special Purpose Vehicle (SPV) would be set up specifically to handle it so that we don't get bogged down in the usual manner of process and procurement issues. We shall mobilize upfront, because deregulation subsidies are paid monthly and we cannot wait monthly to collect money monthly so the money would be borrowed upfront from the CBN and mobilization will start immediately so that it would be clear that we intend to put our money where our mouth is this time around.'She further noted that the issue of subsidies not reaching the people it was meant for has been of a great concern to the government saying, 'We have fought hard to try to ensure that it does. I think that all Nigerians will be very happy, we cannot please all the people all the time but I think most Nigerians will be happy with quantum and impact of all the parameters that we are putting in place to ensure that what we are saying would actually be done.'I think as painful as it is to us as a government it is quite clear that the issue of subsidies have not worked in the manner in which they were intended for the Nigerian masses. the intention of course was to relieve the suffering of the masses across the board by ensuring that our petroleum products are subsidized to give them a comfortable level of procuring the products, unfortunately, since we came into government as a continuum over a year ago, it has become quite clear that the majority of the subsidies were actually going to the middle line operators.''Take kerosene for example, government subsidizes at the tune of about N105 per litre, the landing cost is about N145 per litre, we sell to the middle line operators at N40 per litre, which means that we are subsidizing at N105 per litre and we expect that it will reach the consumer or the masses at roughly N50 per litre that is our recommended price, but as we all know, it reaches them at a more higher cost. On the average right now, it cost N85 per litter. There has been time when it has been over N100 per litre. 'And this is very painful for us. We have flooded the market with the product, yet there is still some part of the country where the product remains fairly high cost wise, which means that the middle line operators are gaining both ways. They receive the subsidy from government and at the same time they are charging the consumers double and sometimes more than double the price. In order words the masses are not gaining the benefit of this heavy subsidization. 'She also noted that all measures put in place to arrest the situation in the past including closing down businesses and stations failed.'A lot have been done already, operators, business and stations have been closed down, some suspended from service as punitive measures by our regulators, DPR. But the truth of the matter is we are not in a military regime, the market forces of supply and demand has to be allowed to a certain extent. Yes we are tightening up operations even as we speak; we are reforming our regulatory agencies as well. Because we need to be tight, we needed them to be working at the optimal level going forward, even in terms of deregulations, when it happens,' she said.She also put part of the blame for the astronomical rise in cost of subsidy on the increase in price of the product at the international market.She also doubted the possibility of government implementing the removal of subsidy in the coming year as planned, as she noted that not until all discussions are concluded and agreement reached, it would be wrong to give a definite date.'We are still in the discussions with labour and other stakeholders. Until that is finished I don't think it is right to give any definite date for the roll out of the implementation of subsidy removal. We are still in discussion with major stakeholders including the National Assembly.'The minister who also spoke on the Petroleum Industry Bill (PIB) said at the moment the situation is not in the hand of the executive as the bill is still before the National Assembly, adding that 'It becomes almost illegal for the executive to officially write on the matter to the NASS.'She however said the government is working 'hand in hand in such a momentous and critical bill of the oil and gas sector of our economy. We have a very distinguished committee set up which has looked already at a lot of interesting part of the bill that were posing some discomfort in some areas such as the fiscal and commercialization of NNPC.
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