Fuel Subsidy Removal Latest: National Economic Council Supports Subsidy Removal From January 2012
President Goodluck Jonathan’s determination to forge ahead with his planned removal of fuel subsidy next month in the face of mounting opposition from labour and civil society groups received a major boost yesterday.
The 36 state governors under the auspices of the National Economic Council, NEC, urged the President not to reverse the January, 2012 take-off date for the outright removal of subsidy on petroleum products.
This is just as the Nigerian Labour Congress, NLC, vowed to mobilise Nigerians against the policy. Also, Catholic Bishop of Sokoto, Rt Reverend Matthew Hassan Kukah challenged President Jonathan to shelve the idea of removal of fuel subsidy, for now, and tackle insecurity which he argued is more serious than fuel subsidy.
The NEC meeting which lasted over six hours, and was presided over by Vice President Namadi Sambo, also approved the removal of electricity distribution from the exclusive list and placed it in the concurrent list, to enable state governments with the required capacity to partner with private investors to form entities that distribute power within their domain.
The council meeting which held at the Council Chambers of the Presidential Villa also approved aggressive measures to tackle the growing insecurity in parts of the country, so as to sustain and increase the pace of Foreign Direct Investment, FDI, in the country.
Governor Peter Obi of Anambra state who briefed State House Correspondents at the end of the meeting stated that though the removal of the subsidy has its temporary pains, government was concerned by its inevitability, saying that “we cannot sustain subsidy any longer”.
Joined by Governor Olusegun Mimiko of Ondo State and the Minister of National Planning, Dr Shamsudeen Usman, Mr Obi said “we have all taken a collective decision to support the proposed removal of subsidy on the down stream sector by the president next year.
“In respect of this, the federal government has produced a comprehensive document which spells out clearly how the reinvestment funds from next year’s deregulation will be channelled towards creating social safety nets and critical infrastructural project, to help the poor cushion the effect. The focus, he disclosed “will be on,”(a). reducing infant and maternal mortality; (b). Funding public work programmes/youth unemployment and urban mass transport scheme, which is being worked out with labour; (c). Building high profile infrastructural projects as roads and rails, water resources, power and refinery (with the private sector)”.
While States and local governments are to prepare their own programmes in order to enhance the effectiveness of the project for the benefits of Nigerians, he said “they will be collaborating with federal government, in line with the framework for the implementation of the programme”.
A board of reputable professionals from different sectors, he explained will be established for effective management of the freed funds for the benefit of the people. According to the Governor, “the board which will function independent of government control, will ensure transparency and proper application of the funds. states to embark on necessary actions in areas of advocacy to sensitize Nigerians on the expected benefits from deregulation. key benefits of the deregulation include free entry and exit for investors, promote competition and ensure adequate supply of products”.
On security, Mr Obi said “the NSA briefed the meeting on the security challenges in the country and sought the cooperation of state governors in working closely with the federal authorities in order to meet the security challenges and ensure the security of life and property for every Nigerian”. He explained that “as critical partners and stakeholders in the ongoing power reform, states have been assigned roles in power distribution and generation with the state with DISCO (distribution company) in captive areas allowed to own some equity in the company”.
Governor Obi who is also a member of the Economic Management Team, EMT, disclosed that the Nigerian Electricity Regulation Commission, NERC, has been directed to issue operational licences to states that intend to either generate or distribute power provided they meet the required conditions.
Federal Government’s policy, he noted is to encourage states to participate in the power reforms in order to enhance power supply in the country. “some categories of customers are to be subsidised. the idea is for those who can afford it to pay the appropriate tariff while the very low users will be subsidised”, he said.
The meeting approved the constitution of committee of six governors to work out a strategies for the effective take off of power distribution programme by willing states.
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