Policy decisions taken without consulting APC leaders – Presidenccy
The presidency on Thursday said that it takes key policy decisions in the running of the government without seeking inputs of leaders of the governing All Progressives Party (APC).
In fact, the latest policy on fuel hike was taken without consulting the party leaders, the government confessed.
The Federal Government also said it will be wrong for anyone to think it has just removed the subsidy on petrol, saying it had long been removed.
It, however, said Nigerians will benefit more at the long run following the fuel subsidy removal.
Secretary to the Government of the Federation (SGF), Engineer Babachir David Lawal and the Minister of Information and Culture, Lai Mohammed, made the disclosure on Thursday at a meeting with party leaders at the APC National Secretariat in Abuja.
The meeting was called to make known some of the government policies to the party leaders so they could effectively communicate it to the generality of Nigerians and not speak on government programmes in different tongues.
Admitting that the government had not been carrying along the party leaders, the SGF said, “In 10 days time the APC government led by President Muhammadu Buhari will be one year in office. In these 12 months quite a number of key decisions have been taken. Remember that the spirit behind the formation of the APC and indeed the drafting of its constitution is that the party will be a very consultative one and that every now and then the party, the executive branch of government, will interact with the political arm of government, that is the party itself.
“Along the line, key decisions have been taken by government; it has not been possible that every time such key decisions were taken the party will be consulted. Nevertheless, the president has tried at every step of the way to consult quite a few of the key members of our party.
“One of the major decisions that the government has taken in recent time is the removal or the deregulation of the pricing mechanism of the downstream sector of the petroleum industry.
“We feel that the leaders of our party and the government need to have a class interaction to present the government side of the issue to you.
“This is a family discussion and the government side is very well equipped to respond to whatever issues you will want answers to”.
Lai Mohammed, speaking on the controversial fuel subsidy removal, said the government intentionally did not make provision for it in the 2016 budget, and therefore it should not be seen as something that has just been removed by the government.
“It’s important that we get the concept of liberalisation very well because this is not about subsidy removal. In the 2016 budget we made no provision for subsidy and you cannot remove what was not there. Secondly, we did this because in 2015 alone, we paid over one trillion naira in subsidy and one trillion naira in subsidy is 1/6 of the entire national budget so we agreed that we are not going to put subsidy. So what we did was not removing subsidy but actually liberalisation; but we had to do it because if the country is to survive we do not have an option.
“We do not have an option because the regime before now talking about the fuel regime was based on a process where some licensed oil marketers would go to the central bank and open a letter of credit. When a letter of credit is opened they bring in the fuel but unfortunately the price of crude which accounted for over 70 percent of our fuel exchange crashed from an all-high level of $100 to under $30. As a matter of fact for some parts of this year we sold crude for $28.
“It’s just like somebody who had been earning N100,000 a month suddenly his salary is reduced to N30,000, he will need to make some very painful adjustments. So the truth of the matter is that we have to do this because there is no availability of foreign exchange. We don’t have sufficient foreign exchange to open letter of credit for anybody that wants to bring in fuel.
“Last month, I was informed that the total amount of foreign exchange available to Nigeria was $550 million and NNPC needed $500 million out of it so you can see why it’s not working.
“Since October last year, 90 percent of the petrol that has been brought in till date was brought in by the NNPC because all the major independent marketers have refused to bring in petrol. Why? Because they said they had no access to foreign exchange and we can’t expect them to buy foreign exchange in the open market and sell N86.50.
“So NNPC had to step in not because NNPC also had foreign exchange. What NNPC had been doing is that they had been exchanging the 445,000 barrel of crude allocated daily for local refining and it has engaged in a transparent process called DSDP-Direct Sale Direct Purchase. It now gives this 445,000 of crude a day and changes it for petrol to come to Nigeria but even that has its own disadvantages.
“The first is that the 445,000 barrels of crude even if we get all of it to change for petrol, accounts for only 48 percent total daily consumption for the country. What NNPC had been doing since October is to dip into the crude meant for the Federation Account to supplement the DSDP.
“The implication is that it deprives the Federation Account money that would have accrued to them which would have been divided between the Federal Government, State and Local Government. If you notice last month in the history of this country the least amount was distributed – N299 billion between the three tiers of government. So, this new price regime is not about an option. It is not as if this is option A,B or C it is about saying look we must face reality. We must be courageous enough to take decisions that in the long term will benefit Nigerians.