Subsidy: Diezani ordered subsidy removal-investigations

Some members of the Federal Executive Council are irked by the role played by the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, in the removal of fuel subsidy by the Federal Government on Jan 1, 2012.
The cabinet members are said to be grumbling secretly about the removal of the subsidy amidst the serious security tension in the country earlier than the anticipated date.
SATURDAY PUNCH investigations showed that Alison-Madueke, Nigeria’s first female petroleum minister, played a central role in the removal of the petrol subsidy on Jan 1, 2012 to the consternation of many of the ministers who were not expecting the announcement.
It was learnt that the announcement of the removal of the subsidy on New Year’s Day came as a shock to many FEC members, who were anticipating the removal in April 2012 as announced by the Group Managing Director of the Nigerian National Petroleum Corporation last December.
Mr. Augustine Oniwon had said that he was not anticipating the total removal of the subsidy this month as the lifespan of the 2011 budget was expected to terminate in March 2012.
“I think what people should really look out for is that in the 2012 budgetary proposal, there is no provision for subsidy. And if there is no provision for subsidy, it will be illegal for the government to implement subsidy,” Oniwon had said.
“We believe that when the implementation of the (2012) budget takes off, deregulation would then take off with it.”
The implementation of the 2012 budget will commence in April.
A source close to the Presidency said that even the Minister of Finance, Dr. Ngozi Okonjo-Iweala, who had been consistently criticised by the public as the person behind the hurried removal of the subsidy, didn’t know that the subsidy was going to be removed in January.
It was learnt that the minister was occupied with making elaborate preparations for consultation and awareness creation among the relevant stakeholders on the issue of the subsidy ahead of the April date when the subsidy removal was announced by the FG.
The source said, “It was the Minister of Petroleum Resources that instructed the Petroleum Products Pricing Regulatory Agency to announce the total removal of the subsidy on Jan 1, 2012.”
It was learnt that Okonjo-Iweala was in the United States when the PPPRA, a subsidiary of the NNPC being supervised by Alison-Madueke, announced the removal of the subsidy.
The source said that it was curious that Okonjo-Iweala, the coordinator of the Jonathan’s Economic Management Team, was not in the picture of the January date for the removal.
Also, an aide of a minister believed to be close to the President said that most ministers were of the view that while the government’s policy was widely accepted, the date of implementation was flawed.
“Oga (the President), told me that Alison-Madueke’s colleagues believe that the timing of the subsidy removal was wrong,” the aide said.
The source argued that the announcement of the removal of the subsidy in January was in violation of an agreement in government circles that issues relating to the subsidy were left for Okonjo-Iweala to handle.
The source said that it was when the subsidy crisis escalated that all the ministers and advisers were called out to speak in favour of the policy with a view to convincing Nigerians on the issue.
Many of the members of the cabinet are said to be of the opinion that while the President means well with the subsidy removal policy, its implementation was devoid of the necessary strategy to make it succeed.
The source said that the ministers and even some of the security chiefs of the Jonathan Administration were not comfortable with the decision, which came six days after the bombing of St. Theresa’s Catholic Church, Madalla, Suleja, Niger State, in which 43 worshippers died.
The source said, “The Minister of Finance was just unfortunate; she wasn’t the one behind the hurried removal of the subsidy.
“The woman was in the United States when the PPPRA announced the removal of the subsidy. The woman was busy preparing to reach relevant Nigerians, to network on this sensitive issue from January so that it could be removed in April.
“You can see from the outcome of the Town Hall Meeting organised by the Newspapers Proprietors Association of Nigeria in Lagos that most people were expecting further consultations on the issue,” the source said.
It was learnt that many council members were taken aback by the removal of fuel subsidy on New Year’s Day 1.
SATURDAY PUNCH learnt on Friday that they had thought that the President’s consultation with the various segments of the country would continue in the New Year before the subsidy removal in April.
A top cabinet member, who is also part of the National Economic Team, said there was a consensus on the need to do away with the subsidy.
He, however, added that there was no agreement on the date when the policy would commence.
Jonathan had in the Medium Term Expenditure Framework submitted to the National Assembly last October said that fuel subsidy would be removed in January.
Investigations, however, showed that following criticisms that greeted the policy, the council thought that the January date was not feasible.
The senior member of FEC said the criticisms informed the decision of the government to embark on wide consultation and enlightenment.
“This informed the statement made by the Minister of Finance at a news conference on Dec 14, 2011,” the FEC member added.
Okonjo-Iweala, had at the news conference said, “Mr. President is consulting widely on the subsidy issue. He has been consulting with various stakeholders in the country, including private sector operators, students, religious leaders and others. At the end of the wide consultation, we will give him room to take a decision.”
Besides, investigations showed that some FEC members were of the opinion that the consultation promised by the President had not been concluded.
The FEC member, who spoke about disagreement in the council over the subsidy issue, cited the meeting the organised labour had with the President on Dec 21, 2011.
The meeting, which was held at the Aso Rock Villa, Abuja, ended in a deadlock with organised labour saying that it did not expect the Presidency to remove the fuel subsidy until it had concluded the consultations with all stakeholders.
The organised labour added that given the high level of insecurity in the country, the hardship Nigerians were facing and deepening poverty, the removal of fuel subsidy would be injurious to the citizens and the country.
During the meeting, Jonathan was said to have agreed to meet with organised labour again before announcing the fuel subsidy removal date.
According to the FEC member, it was not only the organised labour that was surprised when they heard about the fuel subsidy removal, many ministers were also taken aback.
The top FEC member explained, “Many ministers and security chiefs were surprised that fuel subsidy was removed on Jan 1. They thought that with the insecurity in the land and the Christmas Day bombings (in Madalla), the fuel subsidy removal would be delayed.
“The first FEC meeting was supposed to hold on Jan 11 (2012) after the New Year holiday, but an emergency meeting was convened on Jan 4 so that members could be briefed. Many ministers had to join the campaign to justify the government action because of their loyalty to the President. We’re part of this government, we cannot do otherwise.”
Another minister told one of our correspondents on the condition of anonymity that although all the cabinet members were in support of the removal, a majority of them felt that the timing was wrong
He stated that when the matter was raised at the council meeting, some ministers said that Jonathan be allowed to deal with the menace of the Boko Haram sect first before removing the subsidy.
The minister said, “We said that since the governors were in support of the subsidy removal, it will be easy to sell the idea to Nigerians, but we should wait till April.
“That was why the NNPC man said that while briefing journalists the other time. Of course, Nigerians held on to that and we were all happy to get to know that when the date was mentioned, Nigerians and labour did not oppose it.”
He added that in spite of the fact that many ministers were not carried along, they were forced to support the government’s action.
The minister stated, “As appointees of the President, we have to be seen to know what is going on in government. We should not present the matter before the public as if we have a divided house.
“But actually, a majority of us felt that the timing was wrong for the full implementation of the deregulation policy.”
In her defence, Alison-Madueke reportedly told the council that she took the decision because the FG didn’t make any provisions in the NNPC budget for fuel subsidy payment from Jan 1, 2012.
Investigations showed that public statements by the FEC members after the Jan 4 meeting was part of efforts to rally round the President, who is disturbed by the protests that greeted his action.
Okonjo-Iweala, who on Dec 14, said that the President was still consulting, on a Radio Nigeria current affairs programme on Jan 8, said, “It was never to my knowledge that the President gave such a date (April 2012). There is no particular time one could say was best suited for the withdrawal. It’s the prerogative of the President. The important thing is that we cannot carry on the way we did in the past. It would be plunging our future into crisis.”
When contacted, the Group Public Affairs Manager of the NPPC, Mr. Levi Ajuonuma, said that he did not have time “for that nonsense (alleged role of the petroleum minister). The subsidy has been removed and it has been removed.”

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