Govt Should Stop Fuel Subsidy, Avenue For Corruption - Sam Nzekwe

 

The former President of the Association of National Accountants of Nigeria, Sam Nzekwe, says that fuel subsidy should be suspended because, according to him, it is an avenue through which "unnecessary demands" are made.

He stated this in reaction to the capital spent on subsidizing petrol in 2020's first quarter.

In a report by the Nigerian National Petroleum Corporation (NNPC), petrol subsidy has consumed N101.65 billion just in the first quarter of 2020.

In January alone, NNPC spent about N43.31 billion on petrol, and in February, N20.68 billion, while N37.66 billion was spent in March.

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Nzekwe said that officials use the subsidy to "finance corruption," and that the money that would have been useful in other sectors is being funneled into subsidizing petroleum, with little or no impact on the lives of the citizens.

“There is no need for subsidy again because they are using it to make unnecessary demands and this is the corruption that we are talking about. They are also using it to finance corruption too," he said

“The money that they would have used for other sectors or even send to FAAC is being used for subsidy and we cannot actually quantify its impact on the masses; rather, it is used to enrich a very few.”

“The NNPC should not be the only one importing petrol. The downstream sector must not continue like this. Other players should be allowed to play in the space too. The sector should be fully liberalised.

“And it is because the NNPC is the only one importing and almost running everything that makes it simple for it to say whatever it wanted as expenses on subsidy or under-recovery. This should not continue.”

Other players in the oil sector, like the Executive Secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA), Abdulkadir Sadiu, said that the agency would continue to set the price limit for petrol products in the market, even in the face of strong opposition from oil marketers, to avoid "price gouging."

He said, “The Central Bank of Nigeria regulates the banks and other financial sector operators; the Nigerian Communications Commission regulates telecommunications, etc, and the same exists for operators in Nigeria’s downstream petroleum sector.

“To this end, it is not out of place for the agency (PPPRA) to provide a guiding price band with the aim to protect consumers against price gouging.

“It is important to also state that there is nowhere in the world that deregulation means total lack of control, supervision, or oversight.”