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IPMAN Opposes Tinubu Subsidy Removal Plan, As NNPC Backs President
The Independent Petroleum Marketers Association of Nigeria has opposed the plan by President Bola Tinubu to enforce his predecessor’s decision to remove fuel subsidy by June ending.
Tinubu had earlier on Monday, in Abuja, affirmed that his administration would not continue to pay subsidy on petroleum products.
He said given the high opportunity cost the Federal Government was suffering to fund subsidies, it was no longer justifiable to continue.
“The fuel subsidy is gone!” Tinubu exclaimed during his inaugural address at Eagle Square, Abuja, shortly after he was sworn-in as the 16th President of Nigeria.
The President said “Subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.
“We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favoured the rich more than the poor.”
Tinubu said since there was no provision for subsidy in the budget from June 2023, and it stands removed.
On his economic agenda for the next four years, Tinubu said his administration would target a minimum annual GDP growth of six per cent. To do this, the new government will enact budgetary and tax reforms that will boost the economy and address multiple taxation that stymies foreign direct investment.
“On the economy, we target a higher GDP growth and to significantly reduce unemployment. We intend to accomplish this by taking the following steps: First, budgetary reform stimulating the economy without engendering inflation will be instituted.
“Second, industrial policy will utilize the full range of fiscal measures to promote domestic manufacturing and lessen import dependency.
“Third, electricity will become more accessible and affordable to businesses and homes alike. Power generation should nearly double and transmission and distribution networks improved. We will encourage states to develop local sources as well.”
To foreign and local investors, he said “Our government shall review all their complaints about multiple taxation and various anti-investment inhibitions. We shall ensure that investors and foreign businesses repatriate their hard-earned dividends and profits home.”
IPMAN opposes plan
However, reacting on Monday, IPMAN said it was opposed to the new president’s subsidy removal plan
The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Ukadike Chinedu, said the new government should dialogue with marketers before taking the decision to remove subsidy.
“We are not in support of the removal of fuel subsidy at this time. We have said it repeatedly that our refineries should be fixed before taking such decision that will cause galloping inflation and inflict more hardship on the masses.
“The government of President Tinubu should not adopt what is in the transition document handed over to it by the administration of former President Muhammadu Buhari. Someone (Buhari) who for eight years did not remove subsidy is advising a new government to remove it.
“That is not fair and should not be adopted. Rather the new government should sit and discuss with marketers and other stakeholders on how to manage the fuel subsidy regime. We now have the Dangote Refinery, but all our refineries are still not working, so we don’t think removing subsidy is the right thing to do now,” Ukadike stated.
He said IPMAN was ready to work with the new government and would proffer measures to address the fuel subsidy regime, instead of effecting an outright halt in subsidy.
When contacted to state their position on the issue, the Petroleum and Natural Gas Senior Staff Association of Nigeria stated that it would not comment on the development now, as it was currently studying the new administration.
“We wouldn’t want to comment on the fuel subsidy removal matter now because we are still studying the situation and the new government of President Tinubu,” the General Secretary, PENGASSAN, Lumumba Okugbawa, stated.
While IPMAN insisted that subsidy should not be removed without the repairs of Nigeria’s refineries, the Major Oil Marketers Association of Nigeria maintained its position that fuel subsidy should stop.
The Executive Secretary, MOMAN, Clement Isong, said Nigeria was burning its earnings by paying trillions as subsidy on petrol.
“Currently, we are told that this year that we are to spend about N6tn on subsidy. I am sure that in our hearts we all know that if we invested that N6tn in sustainable programmes, it will grow the economy. It is a better way to go than to burn it in fuel subsidy. We all know this,” he stated.
Fuel queues resurface
Barely a few hours after Tinubu’s announcement on subsidy, fuel queues resurfaced in Abuja, Lagos and some states.
Motorists besieged filling stations in Abuja, Nasarawa and Niger states on Monday afternoon following the news.
The announcement triggered a rush for petrol at fillings stations in Abuja and neighbouring states by motorists, as they struggled to get their tanks filled, over fear that once subsidy ends, the cost of PMS could rise above N500/litre.
Oil marketers had projected that the cost of the commodity could hit N700/litre, once the Federal Government ends subsidy on petrol in June this year.
“It is not out of place to rush and fill your tank now that you can get the product for less than N200/litre, since the new President has declared that subsidy is gone,” a motorist in the long queue at Salbas filling station, Kubwa-Zuba Expressway, who simply gave his name as Ayoola, stated.
NNPC Backs Tinubu On Fuel Subsidy Removal, Says No Need For Panic Buying
The Nigerian National Petroleum Company Limited (NNPCL) has welcomed the pronouncement of President Bola Tinubu on the removal of fuel subsidy.
Responding in an emergency press conference at the NNPC Towers, Abuja, NNPCL told Nigerians that the move was in the best interest of the company.
According to the GCEO of the company, Mele Kyari, the company has been spending a substantial amount of its profits in the subsidy of the product
Kyari however said there was no need for panic buying as fuel queues had been noticed in some areas of the FCT.
He noted that the company had enough product to supply the country for the next 30 days, adding that it was monitoring its supply and distribution networks around the country.
Experts react
However, the Centre for the Promotion of Private Enterprise has shown support for the decision of the new president, Bola Tinubu, to unify the exchange rate and remove fuel subsidy.
This was according to a statement on Monday by the CPPE’s Chief Executive Officer, Dr Muda Yusuf.
The statement read, “The Centre for the Promotion of Private Enterprise welcomes the decision of the new President, Bola Tinubu, to put in place a unified exchange rate regime. It should be clarified that this is not a devaluation proposition. Rather it is a pricing mechanism that reflects the demand and supply fundamentals in the foreign exchange market, which allows for rate adjustments as and when necessary.
“It is a model that is predictable, transparent and sustainable. It is a policy regime that would reduce uncertainty and inspire the confidence of investors. It is a policy framework that would minimise discretion and arbitrage in the foreign exchange allocation mechanism.”
NLC, TUC respond
The Nigeria Labour Congress on Monday said TInubu decision on fuel subsidy removal was not a well thought move.
The National President, NLC, Joe Ajaero who spoke in an interview with one of our correspondents in Abuja said the announcement would also draw the economy of the country backward by 50 percent.
“The comment on fuel subsidy removal is not well thought out, coming as an inaugural speech. It is going to draw the economy of the country backward by over 50 percent within the next 48 hours. Nigerians will speak in one accord at the appropriate moment,” he said.
The Trade Union of Congress also insisted that the newly sworn-in President must meet with the organized labour before making pronouncements about removal of fuel subsidy.
The National Vice-President, TUC, Timmy Etim, said, “The president must meet with the organized labour before such pronouncement can be made. You cannot just make such announcements and then the media will amplify it thereby causing trouble. It is just a mere word of mouth pronouncement. Such pronouncement will lead to increase in panic buying and then you’ll start seeing fuel stations sell at high prices. The president needs to meet the organised labour first. He should not disappoint the people who brought him into power by causing hardship.”