Finance Commissioners from the 36 states of the federation rose from the Federation Accounts Allocation Committee, FAAC, meeting in Abuja, yesterday with a resolution asking President Goodluck Jonathan to withdraw fuel subsidy.
The Ebonyi State Commissioner for Finance and Chairman of the Finance Commissioners Forum, Mr. Timothy Odaah, told journalists that fuel subsidy had failed to achieve its objectives and had become a source of massive fraud which must be discontinued in the interest of the Nigerian public.
His words: “We looked at subsidy on oil and see that it is more or less a solution worse than the problem you intend to solve. You would remember that during the National Conference on Economic Development, NACONFED, meeting in Niger State, it was one of the issues we presented.
“Looking at it, you discover that it is not solving the problem it is meant to solve.
“But you discover now that it is the average poor man that suffers. For example, stand by the street, most of the transporters are not applying any benefit from subsidy in what they charge because we know of course that the Federal Government had a good intention to subsidise transportation so that it will be to the absolute benefit of the poor man and every Nigerian.
“But you discover that there is no reflection of that subsidy benefit. Besides, it is like a system that robs Peter to pay Paul. It makes the rich to get richer and the poor to get poorer.
“For example, look at this simple analysis of econometrics: If a poor man uses a motorcycle that uses five litre‑full tank then you look at the subsidy granted at 50 kobo, for example, the 50 kobo on five litres will give you N2. 50k.
“Then you look at a big man that has 10 cars. Each of his cars has 100-litre tanks. That will be 1,000 litres. Then multiply it by 50 kobo and you will see the worth of subsidy the big man enjoys.
“Then subtract the poor man’s subsidy of N2.50 kobo, what do you have? The same thing applies to the states.
“There are some states that are fully industrialized. You have many industries, factories and you use this subsidy in that place. The people who benefit more are those states that are fully industrialized because the fuel consumption of those factories use more of the subsidies, unlike the states that are under‑industrialised.
“What we are advocating is that the subsidy should be removed so that every state or any member of the federating units sharing from FAAC will take its own money then decide to use it or grant subsidy at a level that it will be able to afford.
On marketers
“Then you look at the issue of subsidy as it applies to some individuals. The marketers are not truly showing the intention of the Federal Government because they have created a very great and big market for themselves in certain ways. I said in certain ways because transparency is not coming up.
“There are some people who are eating on the subsidy to the disadvantage of others. It is because of this that we passed a resolution at FAAC and that is the opinion of the Forum of the Finance Commissioners: that a call should be made to his Excellency, the President of Nigeria, Dr. Goodluck Jonathan, so that he will reconsider the position of this subsidy.”
