Fuel Subsidy Removal Still Under Consideration – TheNigerialawyer

The Director General, Budget Office of the Federation, Mr. Ben
Akabueze, yesterday said the federal government was still mulling
the removal of fuel subsidy.

He also pointed out that there were concerns over the recent
increase in workers’ minimum wage.

Akabueze, said this on the ‘Morning Show,’ on Arise Television,
a THISDAY sister broadcast station.

Speaking on the recent approval of a new national minimum wage
and how to avert further borrowing to fund the increase, he said:
“The government would make the recommendations public when it deems
it necessary to do so and there is a process that is currently
on-going.

“It would be difficult for me to comment even though I was a
member and secretary of that committee.

“Broadly speaking, the recommendations about initiatives for
raising revenues and for cutting cost where feasible.

“I can assure you that there are not much recommendations that
are totally novel.”

Responding to a question on the raging debate of the fuel
subsidy, he said: “Again this is a matter that is under
consideration. Right now, we had a situation where the current
administration has made some adjustment in petroleum pricing on PMS
and because all other products have been deregulated. It is only
about petrol with N145 on the price.

“Given the current dynamics of the oil market, the landing cost
of PMS is more than the price ceiling and so what has happened is
that the private traders of petroleum products have moved away from
the market but NNPC given its commitment to ensure availability of
petroleum products in the country now finds itself the only one in
that business of importing and distribution.

“And in that process, is incurring losses. So the under-recovery
of the trading in PMS washes off on the over recovery of profits in
some other lines of their business and that is the way it is
happening until we get to the point where we can make some kind of
firm decision on how to proceed.

“Whatever decision we make on recovery is only interim. The goal
of the administration is to increase domestic refining capacity.
When we have sufficient capacity, some of the cost elements that
contribute to what we call subsidy would disappear and so if the
products were refined domestically, we would expect cost like
transportation, financing cost for period of ordering to delivery
and even the infrastructure cost that is required to manage and
handle importation, insurance and more. Whatever happens to subsidy
is only interim measure.”

Commenting on the controversy surrounding the federal
government’s Tradermoni, he said: “Anyone that says Tradermoni is
extra budgetary probably hasn’t read the budget and doesn’t
understand it.

“There is a N500 billion provision in the budget and it has been
there in the last three years, every year, in what we call the
social investment program of the government and Tradermoni is only
a small component of that.

“Tradermoni is provided for in the budget but what has happened
also in terms of the delivery and mechanism for delivery. Rather
than set up another agency or another structure, of government,
government decided to utilise the Bank of Industry which already
had an arm of it focused on MSMEs. “One of the programmes under the
social investment and there are five programmes and one of them is
the government empowerment programme (GEP) and Tradermoni,
Marketmoni are simply just an element of that and a small one at
that. So there is nothing extra budgetary about that.”

Responding to a question on the 2019 budget that was recently
passed by the Senate, he said:

“As we speak, we have not received the details of what they
passed from the National Assembly. And on the usual process, that
when they pass the budget, they communicate details to Mr.
President who passed them on to us, and we then match what they
have passed to what was sent and then try to understand rationale
for the changes and what need to be done to implement them and if
it was implementable.”

Akabueze also explained why some items on the budget were
repeated in the annual budget.

“Also, because resources are constrained, if an agency has a
need for 200 computers, we then would say to them that ‘sorry, we
might not be able to fund 200 computers in one year, we will be
able to fund only 50 computers in a year.

“What that means is that in year one, you will see 50 computers
in the budget of that agency, in year two, you would see 50
computers in the budget of that agency again, then same as year
three and year four.

“But that is not repetitive, but 200 computers bought over four
years.”

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