The convener of the Save Nigeria Group, SNG, Pastor Tunde Bakare, on Sunday endorsed the recent removal of subsidy on petrol in the country, but advised that the Federal Government should go the whle hug and deregulate downstream sector.
According to him, “Nothing short of a complete deregulation of the sector, characterised by adequate local refining, will salvage the petrol crisis in Nigeria.”
The cleric, who one of the champions of the opposition of the removal of subsidy on petrol during President Goodluck Jonathan administration, enjoined the the Nigeria Labour Congress and Nigerians to dialogue with the Federal government with a means to finding a solution to the persistent fuel crisis in the country.
Bakare, who spoke during a state of the nation broadcast, entitled “The Courage to Do the Right Thing”, at the Latter Rain Assembly in Lagos, the unfavourable economic environment in the country has made compelling for the removal of the subsidy.
He however do not agree with insinuations that the removal of subsidy in 2012 was the same as in 2016.
Bakare said, “To begin with, unlike the 2012 situation when the price of crude oil was over $100, the global economic condition is highly unfavourable with the fall in crude oil prices from about $65 when the current government came into power to about $48 presently. The depletion of external reserves through years of mismanagement and corruption, coupled with the fall in crude prices, has severely weakened the naira in relation to the dollar.”
Besides, he added, “The Naira was 218 to a dollar at the parallel market as at the time the new government came into power; it is now about 340 to a dollar. In comparison, it was about N164 to a dollar in 2012 when we protested.
“In the midst of such a chaotic economic environment, the new government met an alarming subsidy debt. We can recall that, by December last year, at the height of excruciating suffering experienced by Nigerians due to fuel scarcity, approval was given for the payment of N407.07 billion of the outstanding N642.922 billion, which implied that N235.852 billion remained outstanding – a sum that would likely increase due to exchange rate differentials and interest charges.
“By April 2016, there was reportedly a near dry up of foreign exchange due to subsidy repayment among other demands. Against the fact that our forex receivables have significantly diminished given the fall in global oil prices, it is obvious to the right thinking Nigerian that this system of subsidised consumption that gulps up to 18% of all government revenue, even in an administration that is making great efforts to combat systemic corruption, is unsustainable. It is through this lens that fuel subsidy removal must be examined.”
Faulting critics of the SNG for allegedly keeping silent over the hike in pump price of fuel, he said that the current situation differs significantly from the corruption-ridden 2012 subsidy crisis which “we rose against in 2012.”
