Human rights lawyer, Femi Falana, has condemned the recent removal of
oil subsidy by the Federal government which has caused the pump price of
petrol to jump to N145 per liter. According to Falana, Buhari has
reneged on his campaign promise of not increasing pump price. Falana
said this in a statement he release yesterday May 12th. Read the
statement below:
During the campaign last year, the candidate of the All Progressives
Congress, General Muhammadu Buhari pledged that if elected as President
by the Nigerian people his administration would not remove fuel subsidy.
Since he won the election last year President Buhari has consistently
resisted pressures from the neo-liberal characters in the government to
remove fuel subsidy and increase the price of petrol. On January 18,
2016 the federal government allayed the fear of Nigerians when the price
of petrol was reduced to N86.50k per litre.
In justifying the decision to the people the federal government claimed
that the reduction was due to an implementation of the revised component
of the Petroleum Products Pricing Template for PMS and household
kerosene.
It would be recalled that following the popular agitation against the
removal of fuel subsidy in 2012, the Ministry of Petroleum Resources had
announced the decision of the Goodluck Jonathan administration to set
up 30 green field refineries in the country.
Shortly thereafter, the policy was jettisoned due to pressure from the
cabal of local fuel importers. In 2013, the Jonathan administration
secured a loan of $1.6 billion for the maintenance of the country’s four
refineries. At the end of the repairs the refineries could only refine
about 80,000 barrels of crude oil per day instead of 445,000 barrels
earmarked for domestic consumption.
The Buhari administration has also spent millions of dollars for the so
called turn around maintenance of the refineries. Barely a month ago,
Dr. Kachikwu had announced that fuel subsidy had been removed through
his ingenuity. In celebrating the “success” recorded by him in the
management of the petroleum industry he disclosed that Nigeria was
saving $1 billion in subsidy removal and $1 billion in fuel importation.
He also stated that “for the first time, our refineries are ready to
work now. Crude has been pumped from Brass to Port Harcourt.
Pipeline is being used for the first time in 10 years for the first time
in six years. For the first time we are able to pump to Ilorin, we have
not done that in 10 years.” (Nigerian Tribune, March 16, 2016).
Curiously, Dr. Kachikwu’s “giant strides” in the petroleum industry
appear to have collapsed completely before our very eyes!
Hence, without any public debate or consultation with relevant
stakeholders whatsoever the federal government took the Nigerian people
by surprise yesterday when it decided to increase the pump price of
petrol from N86.50k to N145 per litre. Not too long ago, the federal
government had supported the imposition of higher tariffs paid on
epileptic supply of electricity by consumers.
"In sentencing the Nigerian people to excruciating economic agony the
Ministry of Power defied a court order which had restrained the
government from giving effect to the proposed electricity tariff. In the
same vein, the decision to increase the price of petrol is also illegal
and contemptuous. In the case of Bamidele Aturu versus Attorney-General
of the Federation (unreported suit No. FHC/ABJ/CS/591/2009) the Federal
High Court declared illegal and unconstitutional the policy decision of
the federal government to deregulate the downstream sector of the
petroleum industry contrary to the combined effect of the provisions of
the Price Control Act and the Petroleum Act.
"In total defiance of the said order of the federal high court the
federal government has deregulated the downstream sector of the
petroleum industry. In justifying the illegal policy, Dr. Kachikwu
claimed that “PPPRA has informed me that it will be announcing a new
price band effective today, 11th May, 2016 and that the new price for
PMS will not be above N145 per litre.”
"Since the Petroleum Products Pricing Regulatory Agency (PPPRA) which is
statutorily empowered to recommend the price of petroleum products has
not been reconstituted the unilateral decision of the Executive
Secretary of the body to fix the pump price at N145 per litre is ultra
vires and illegal in every material particular. In view of the
illegality, insensitivity and immorality of the price increase the
federal government should cancel it, revert to the status quo and
consult widely with all relevant stakeholders in the society.
"
However, due to the ongoing fuel crisis in the country the Directorate
of Petroleum Resources (DPR) recently invited fresh bids for the setting
up modular refineries. At the end of the screening exercise sometime in
March this year the DPR announced that it had awarded 22 licences for
modular refineries with combined capacities to refine 1.429 million
barrels of crude oil per day. If the policy is genuinely pursued the
construction of the refineries ought to be completed within the 9-12
months.
"If such refineries are established in the country the importation of
fuel and the fraud associated with it will stop. In the interim, instead
of importing oil from Europe and the United States the NNPC should
refine crude oil for domestic consumption in neighbouring countries
which have functional refineries. After all, Nigeria refines 60,000
barrels of crude oil per day in Cote d’ivoire which is not an oil
producing nation.
"If subsidy had been removed over a month ago and the country has been
saving $2 billion (from fuel importation and subsidy removal) while the
refineries are now working at full capacity Dr. Kachikwu should tell
Nigerians the justification for the new removal of fuel subsidy
announced by him yesterday. The cost elements that make up the N145 are
provocative. If the total landing cost of a litre and other charges are
fixed at N138 what is the basis of fixing the price at N145? For
goodness sake, why should motorists be made to pay NPA/NIMASA charges,
demurrage within and without /storage/ bridging charges etc?
"At this stage President Buhari ought to prevent neo-liberal ideologues
from hijacking the administration for the purpose of punishing the
Nigerian people for the looting of the treasury and mismanagement of the
national economy. Contrary to the position of the parasitic ruling
class that prices of goods and services be fixed by market forces the
federal government has a legal obligation to protect the people from
exploitation. For instance, the virtual collapse of electricity supply
has forced many corporate bodies and individuals to invest heavily in
generators and diesel throughout the country.
Although the price of diesel has crashed all over the world it has
continued to increase in Nigeria due to manipulation. The federal
government should, as a matter of urgency, abolish the monopoly in the
importation and sale of diesel. There is no justification for the
monopolistic control of goods and services under a free market economy!
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