THINGS YOU SHOULD KNOW ABOUT SUBSIDY REMOVAL
I spend the major part of my practice in downstream petroleum sector. I have been on the following roles - participating in processing of licence for petroleum products marketers, site inspection and environmental impact assessment for downstream projects, operating of a 12 million litre AGO storage facility for industrial consumption and currently training operators and managers of downstream petroleum products facilities. Downstream petroleum sector has been the nightmare of every administrations.
What is subsidy?
This is the amount of money Nigeria pays to make products available to the masses at affordable rate.
During Yaradua's administration the real cost of petrol (PMS) was N140 per litre. Government subsidized this cost and made citizens pay N65 while government paid the rest. There was money then. The government sold crude oil at 120 US dollars per barrel. So they could afford subsidy payment. Towards the end of Jonathan's administration things were already terrible for the country. The government could only sell crude oil at about 40 US dollars per barrel and could not afford paying subsidy. There was a push to remove subsidy but labour union and opposition party (APC, Buhari and Tinubu) opposed him sternly. So as karma would have it Buhari had to inherit subsidy amidst poor crude oil sale.
Currently subsidy cost amounts to 400 billion naira monthly. The government cannot afford it. Economy is still very terrible. Oil and gas is not as bouyant as it used to be. No President (Atiku, Tinubu or Obi) can afford subsidy hence the total removal.
Can NLC help? No.
It is now a matter of legal jurisdiction. The Petroleum Industry Act 2021 has completely deregulated the downstream petroleum sector. NNPC is now a limited liability company. Petroleum equilization trust fund has been submerged into the NMDPRA. There is no office, no budget and no fund for subsidy.
This is the reality.
Id Oduok (MISTDO Instructor)
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