We Must Remove Fuel Subsidy Totally – Jonathan

NIGERIANS were told yesterday to brace up for a full deregulation of the petroleum industry’s downstream sector. Fuel prices range from N100 per litre to N110 and N130 in many states – no thanks to supply problems. Motorists are grumbling. But the situation may get worse – price-wise – going by Dr. Goodluck Jonathan’s speech yesterday. In his view, full deregulationof the downstream sector isthe solution to fuel shortage. The popular thinking is that deregulation will bring higher prices; the government insists it will not. The policy, says the government, will ensure regular supply and free some cash to rebuild the country’s infrastructure. To Dr. Jonathan, to attract investors, who will build refineries and end importation of petroleum products, subsidy must go. The President spoke in Abuja when he received the report of the graduating participants of the Senior Executive Course 34, 2012 of the National Institute of Policy and Strategic Studies (NIPSS), Kuru, at the Presidential Villa. The government, in January,announced the deregulationof sector, but its action, which pushed up petrol price, was greeted by massive protests. The plan was dropped, with fuel price rising to 97per litre. Nigeria’s four refineries in Port Harcourt, Warri and Kaduna are working at about 30 per cent capacity. The remaining 70 per cent of the nation’s need is imported. The President noted that only if people could bear thepain, total removal of fuel subsidy would make Nigerians happier. He likened the process of transforming a nation to surgery, which could be painful but would make the patient healthier at the end. “Why is it that people are not building refineries in Nigeria, despite that it is a big business? It is because of the policy of subsidy, and that is why we want to get out of it. “To change a nation is like surgery. If you have a youngdaughter of five years who has a boil at a very strategic part of the face, you either, as a parent, leave that boil because the young girl will cry or you take the girl to the surgeon. “So, you have the option of just robbing mentholatum on the face, until the boil will burst and disfigure her face or you take that child tothe surgeon. On the sighting of a scalpel of the surgeon alone, the child will start crying. “But if she bears the pains, after some days or weeks, the child will grow up to be a beautiful lady.” “There are certain decisionsthat government must take that may be painful at the beginning and people must be properly informed so that they will be ready to bear the pains,” he said. The President expressed optimism that Nigeria will achieve a turnaround in fortune within 10 years, with the right policy. He said: “I believe that you do not need a lifetime to change a nation. Under 10 years, Nigeria can change and people will not even believe that this is Nigeria again. Immediately you come up with strong policies in key sectors of theeconomy and keep it for 10 years, the change will be astronomical.” Comparing Nigeria and Canada on the running of refineries by the graduants, said Canada has 16 functional refineries and Nigeria has four that are struggling to refine at 30 per cent of installed capacitybecause all the refineries in Canada are privately-owned. “Immediately you made thatstatement, I sent a note to my Chief Economic Adviser to tell me the ownership structure of the refineries inCanada. I wanted you to tell us why they are working. Hereplied that all the refineriesin Canada are private sector owned, with strong public sector regulatory regime and this is the key thing,” hesaid. The President, who also commented on the debts being owed by NIPSS, especially N105m tax arrears, said it is a criminal offence for any agency of government to deduct employees’ taxes without remitting same to authorities. “It is a problem in this country, whether you are anagency of government or not, you must deduct tax and if you fail to remit it, it isa criminal offence. We do not encourage departmentsof government to deduct tax and keep it,” he said. The NIPSS participants described the precarious security situation as a disincentive to business in their report entitled: “Resource diversification forsustainable economic development in Nigeria”. They identified unemployment as one of the causes of insecurity and urged the government to address it. “One of the greatest threats to security is unemployment. It provides for unemployed youths and other disgruntled persons to attack the system which they believe is responsible for their plight,” the report said.