A prominent member of Organised Private Sector, OPS, the Nigeria Employers’ Consultative Association, NECA, has said the federal government got it wrong the manner it removed subsidy on premium motor spirit, commonly known as petrol, in June.
In an interview with newsmen, the Director-General of NECA, Adewale-Smatt Oyerinde, said with the benefit of hindsight, one of the things that should have been done before the subsidy removal was to fix at least one of the nation’s four refineries to create a buffer or bridge for fuel prices.
Speaking on whether the expectations of fuel subsidy removal had been met, he said: “When you find yourself in a hole, the first thing you will do is to stop digging. When you stop digging, it does not mean you are out of the hole because you are already on ground minus zero.
”The first thing you will have to do is get yourself out of the minus ground zero to zero level before you can start thinking about development or its gains.
”What has happened now is that subsidy has been removed and when subsidy is removed, one of the things we should have done, with the benefit of hindsight, is to fix at least one of those refineries to create the buffer or a bridge for fuel prices.
”Because we did not do that, the issue of importation at the global market prices, came up and we have to pay at that price. The flip side is that before the last administration left around January and February, it was reported that we were using about 98 per cent of our revenue to service debt.
“It showed that there was no revenue in place. The past administration made provision for fuel subsidy up till June. If the past administration was actually borrowing to fund subsidy, the natural sequence for a business man is to ask himself if he is really saving because you cannot be saving money you don’t have.
”If I am borrowing to fund and I decide not to fund it again, what I have stopped doing is to stop funding it and to stop borrowing. So, you cannot technically say that I am saving because what I have stopped doing is borrowing to support subsidy.
”What we need to do now basically and we are not expecting a miracle, we are not expecting that fuel subsidy is removed and probably the small group that are benefiting from it to say the business is over because there will always be some level of fight back. However, it boils down to government doing the needful.”
”Government remains government, irrespective of how strong the cabal is and it should take responsibility for the consequences of the removal. We believe much more can be done, we believe a lot of stakeholders’ engagements can still be done and we also believe that more transparency can be put into all these issues of fuel subsidy.
”That will assuage stakeholders and help government build consensus around its plan, especially as it relates to removal of fuel subsidy.”