States Support Total Removal Of Fuel Subsidy At FAAC Meeting

fuel subsidy

The federal government might have finally gotten the support it needs to complete remove fuel subsidy from the books of the Federation Accounts Allocation Committee (FAAC) as it enjoyed an overwhelming support by all the states of the federation, according to Thisday sources.

Although none of its governors raised objection at the meeting, it remains to be seen whether the All Progressives Congress (APC) would condemn the total removal of subsidy and claim it would bring more suffering on the masses.

Also, emerging threats by the labour unions which are against current efforts to end the subsidy have the potential of igniting the flame of crisis in the country if a compromise is not reached by all stakeholders.

The committee had during the March FAAC meeting, constituted a sub-committee to among other things investigate and enlighten members on the performance of the existing subsidy scheme.

Consequently, at its plenary last week, it finally took a decision, after being briefed by the ad hoc investigation committee that petroleum subsidy should be scrapped in its entirety “because we’ve discovered it is more or less a solution worse than the problem it tends to solve.”

The decision by the states to throw their weight behind the removal of fuel subsidy, Thisday gathered may not be unconnected with the continued decline in monthly statutory mineral revenue occasioned by oil theft, bunkering and other distortion in production activities.

As a result, allocations from the federation account no longer suffice to execute the infrastructural needs of the states and local governments which are unable to provide the much-needed jobs and execute people-oriented contracts with little resources.

Documents showed that monthly net statutory allocations to states had been on a decline in recent times averaging about N1.5 billion from between about N2 billion in some states.

The onus continued to fall on governments at the regions to deliver on campaign promises to justify their election into public offices by the people.

Essentially, the states argue that the huge chunk of money which is continually set aside to offset fuel subsidy claims were better given directly to the respective states so the resources could be better administered to solve the plight of the people by prioritising their needs.

However, following the latest resolve by FAAC to stop the subsidy deductions, General Secretary of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Mr. Bayo Olowoshile had urged President Goodluck Jonathan to jettison the resolution.

Describing FAAC decision as unacceptable to the union, he argued that removing the subsidy without any corresponding increase in purchasing power of individuals could constitute a negative multiplier effect on all aspects of the economy.

“Government must ensure of the turn around maintenance of all the refineries before removing the subsidy. We told government at a meeting we held in January that certain conditions must be met before the removal. Government must fix the four refineries and build new ones. The corruption associated with supply and distribution of petroleum products in the downstream sector of the oil industry must be eliminated.”

2 COMMENTS

  1. You have not performed with the allocation you have collected so far, and you feel removing subsidy is what will make you to build infrastracture is wrong. You want to create another crisis to discredit GEJ government. Those governors that cannot do anything with the little cannot do anything with all the money given to him. Allow sleeping dog to lie. We don’t want another crisis please. This is my patriotic call

  2. They are only giving us excuses that are not genuine,they only want to enrich themselves,the wrath of God wil come upon those sect of people that wnt to increase the suffering of the masses God bless Nigeia.