Buhari should remove fuel subsidy~transition committee

Firstclass newsline gathered that the transition committee set up by
President Muhammadu Buhari shortly after he was declared the winner of
the March 28 presidential election advised him to end the fuel subsidy
programme and privatise the nation's four refineries.
Senior sources in the All Progressives Congress, toldReutersof the
recommendation on Sunday.
Nigeria, which is Africa's top oil producer and biggest economy,
heavily subsidises petrol and kerosene consumption and relies on
imports for the bulk of its domestic demand due to an underperforming
refining system.
The subsidy regime, which was revealed to have handed out more than
N1tn in fraudulent claims to oil marketers in 2012, is proving to be
increasingly costly.
Buhari is said to be considering the recommendations made in the
strategy report produced by the 19-member committee led by Ahmed Joda.
"The removal of the fuel subsidy is one of the recommendations of the
transition committee," said a senior APC source, who did not want to
be named.
"The committee also suggested to Mr. President that the four
refineries be privatised so that the government stops wasting money on
annual turnaround maintenance," he said.
A second APC source also toldReutersthat these recommendations were
contained in the report given to Buhari earlier this month.
However, the Special Adviser to the President on Media and Publicity,
Mr. Femi Adesina, told a source in a telephone interview that it was
premature to comment on the proposal by the committee since its report
had not been officially released and discussed by the government.
Buhari's predecessor, Goodluck Jonathan, cut subsidies by 90 per cent
in the 2015 budget because government revenues had been hit by the
slump in oil prices.
Nigeria attempted to end subsidies three years ago, doubling the price
of a litre of petrol overnight, in efforts to cut government spending.
The move angered citizens who saw cheap pump prices as the only
benefit they derive from living in an oil-rich country, and led to
eight days of nationwide strikes. The government later reinstated part
of the subsidy to end the strikes.
The prospect of the subsidy removal contributed to fuel shortages in
the final days of Jonathan's administration as importers went on
strike claiming that they were owed arrears of subsidy claims by the
government.
Last week, the Nigerian National Petroleum Corporation said its four
oil refineries would resume production in July.
The ailing refinery system generally runs well below capacity,
sometimes at just 20 per cent, due to neglect and pipeline sabotage.
Firstclassnewsline.net