Oshiomhole stood against fuel subsidy removal, Atiku says

TRACKING___Former Nigerian vice president Atiku Abubakar on Saturday said ruling All Progressive Congress chairman Adams Oshiomole frustrated the past efforts to remove fuel subsidy.

“The Obasanjo government in which I served commenced a phased subsidy withdrawal,” Atiku tweeted on Saturday night.

“I was tasked with negotiating with then NLC Chairman and current APC Chairman who stood strongly against it,” he added.

Atiku said “Obasanjo government achieved some measure of subsidy removal before their exit in 2007.”

This is coming hours after Nigerian Government got rid of costly fuel subsidies and moved to a market-based pricing regime for petrol. Fuel subsidy programme has sparked mass protests and unrest across the country for years.

The Nigerian Government said late on Thursday that President Muhammadu Buhari had granted approval to the Petroleum Products Pricing Regulatory Agency to remove the price cap that was in place for petrol.

“What we are putting in place today is a situation where market forces will take control of prices and eliminate subsidy,” Mele Kyari, group managing director of the company also known as NNPC said in a Twitter post. Savings from the measure would be spent to build infrastructure, boost health care and education, he said.

“The agency shall monitor market trends and advise the Nigerian National Petroleum Corporation and oil marketing companies on the monthly guiding market-based price, PPPRA also said.

Although, Nigeria is the largest producer of oil in Africa, the country imports almost all the gasoline it consumes. The Buhari administration said it has stopped a “costly and corrupt subsidy” programme managed by his predecessor, Goodluck Jonathan, but it still pays the bill to insulate Nigerians from the full cost of petrol prices.

Instead of paying subsidies to importers, as was done under the immediate past administration, the Buhari government made the national oil company responsible for fuel imports and swallowing the difference between its costs and the price at the pump.

On May 11, 2016, Buhari announced a controversial removal of fuel subsidy across the country. The removal saw the petrol price reduced from N87 to N86.50 per litre before increasing it to N141. Later, the price was adjusted further upwards to N145 per litre.

Since then, the government quietly restored subsidy in the pricing template of petrol without any formal announcement. Rather than call the excess cost above the N145 per litre ceiling fuel subsidy, the government gave the NNPC approval to describe it as ‘under-recovery’ as part of its operational cost.

The NNPC then became the sole importer of petrol into Nigeria and was essentially subsidising the product for users.

According to the Nigeria Extractive Industry and Transparency Initiative in 2018, Nigeria spent about N722.3 billion on fuel subsidy.

But due to the impact of the coronavirus pandemic, Nigeria reduced the retail price of petrol by N20 to N125 per litre.

Last week, with the further drop of the crude oil price at the international market, the petrol price was again adjusted to N123.50 per litre.