NEITI says fuel subsidy removal will lift economy from bondage
By Jeph Ajobaju, Chief Copy Editor
Muhammadu Buhari has defended continuation of fuel subsidy but the Nigeria Extractive Industries and Transparency Initiative (NEITI) says its removal will free the country from economic bondage and benefit the poor majority.
“Most Western countries are today implementing fuel subsidies. Why would we remove ours now? What is good for the goose is good for the gander!
“What our western allies are learning the hard way is what looks good on paper and the human consequences are two different things,” Buhari told Bloomberg in an interview published on 21 June.
“My government set in motion plans to remove the subsidy late last year. After further consultation with stakeholders, and as events unfolded this year, such a move became increasingly untenable. Boosting internal production for refined products shall also help.”
However, NEITI Executive Secretary Orji Ogbonnaya Orji disclosed that the agency is working on a research policy advisory on the cost of fuel subsidy to distill facts and figures that reinforce the position of NEITI on subsidy removal.
“The removal of fuel subsidy would free the country’s economy from bondage, benefit the poor majority and possibly hurt the few affluent who are currently rich in the subsidy transactions,” Orji argued at the National Extractive Dialogue (NED) 2022 in Abuja.
He said the dialogue is important because the Extractive Industry Transparency Initiative (EITI) 2019 requires implementing countries like Nigeria to disclose any transaction, including licensing granted and amended.
“It will also require disclosing the terms and conditions for the exploration and exploitation of oil, gas, or minerals from January 2021.”
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Efforts at transparent contracts
Orji said the Petroleum Industry Act (PIA) 2021 mandates the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) to publish the texts of any new licence, lease or contract, or amendment immediately after the granting or signing of such texts.
“In June 2021, Nigeria was appointed the chair of the EITI global network on contract transparency. The network which I chair is tasked with the development of a framework for contract disclosures.
“The network has 20 EITI implementing countries, including Nigeria, as members. I am pleased to report that NEITI is currently coordinating the efforts to deliver on these important tasks and ensure that the provisions of PIA regarding contract disclosures are activated,” he added, per reporting by Nairametrics.
“Specifically, an inter-agencies committee on contract transparency in the extractive sector has been set up and NEITI is serving as its secretariat. The overall goal is to enable governments, companies, civil society and communities to evaluate the energy industry.
“These are aimed at proffering evidence-based policy recommendations for the efficient management of natural resource benefits and the transition from fossil fuel to a renewable energy regime with these countries as case studies.”