Senate’s heated debate and another probe into kerosene subsidy

A recent Senate motion on the plight of kerosene consumers reignited the debate over the propriety or otherwise of the continuous payment of subsidies.

A  motion moved by Senator Babajide Omoworare (All Progressives Congress, Osun Central) on the plight of kerosene consumers in Nigeria sparked a heated debate on the floor of the Senate recently.

The motion brought to light the fact that Nigerians pay amounts ranging from N160 to N250 to buy a litre of kerosene which ordinarily should cost N50, because the Federal Government claims it spends N700m daily subsidising the product.

Omoworare was particularly disturbed that the Nigerian National Petroleum Corporation claimed to have used tax payers’ money without appropriation by the National Assembly.

His motion obviously emanated from a disclosure by the Chairman, House of Representatives

Committee on Petroleum Resources (Downstream), Mr. Dakuku Peterside, at a forum in Lagos, late last year.

While speaking at the event, Peterside claimed that government spent N643bn on kerosene subsidy within a three-year period.

He gave the years as 2010, 2011 and 2012. To drive home his point, the House member told those gathered at the event that the amount spent on subsidies rose to N700m per day, before the end of 2013.

Omoworare added, “Less than 10 per cent of Nigerians benefit from this heartless massive scheme that drains the nation’s treasury. (This is) more than the double aggregate annual budget for education, health, roads, security and agriculture, while a majority of our populace wallow in abject poverty courtesy of this few, mindless and rich cabal network.”

Contributing to the debate, Senator Magnus Abe said, “I said to myself, I am a Senator that is always at home (constituency) all the time. And I listen to the people; and know what their problems are. Nigerians come to talk to me all the time about their problems.

“I have not seen any poor man whose biggest problem is kerosene. So, if you carry this money, N700m, everyday and you say you want to help Nigerians, I doubt if their first request would be kerosene.

“They have problems of healthcare; they have problems of the quality of transportation; they have problems with the quality of education; they have problem of even food; effective nutrition, and they have all sorts of problems.

“Kerosene, to my mind, is one of the most insignificant problems that they have because if you buy a little kerosene, it is supposed to last for weeks. So, if an average family is to set its priorities where it needs help or where it should be helped, I don’t think anybody should go for kerosene.

“They all know that this kerosene subsidy is not getting to anybody. Like I was telling a friend of mine the other day, nobody buys kerosene for N50. Anybody who says that there is anybody who buys kerosene for N50 is not telling the truth because even if you go to depot to buy, your receipt may say N50, but if you pay N50 per litre, you won’t get any kerosene.”

Abe further argued that it was simply a question of “who is fooling whom?” As far as he was concerned, there is no subsidy on kerosene.

All the senators, who contributed to the debate, insisted that the subsidy was being used as a conduit by a few individuals to feed their greed. This, they noted, was because ordinary Nigerians, who needed kerosene for domestic use, were not benefiting from it.

The debate, which started as a clamour to end kerosene subsidy, soon became an agitation to remove petroleum subsidies all together.

Chairman of the Committee on Petroleum Resources (Upstream), Senator Emmanuel Paulker, said his colleagues in the Senate and a certain class of Nigerians, needed not complain about subsidies because they do not deserve to enjoy its benefits.

Paulker said contrary to reports, the NNPC was not the sole importer of kerosene, as such; it was not true that it was the sole beneficiary of subsidy payments. He alleged that some independent marketers were still importing kerosene and at the same time, drawing the attached subsidy.

He, however, noted that it would be very difficult to budget for subsidy because consumption is not static.

He said, “I support this motion but with a heavy heart. What we should know is that the scandal of our subsidy starts from our wharf. You’ll agree with me, Mr. President, that both you and all of us in this chamber, don’t deserve that petroleum products be subsidised for us.

“The fact of the matter is that some classes of Nigerians don’t deserve to enjoy the subsidy. In fact, those clamouring for the masses are even the ones wrecking the economy. If the ordinary man deserves that PMS (petrol) be subsidised, you and I don’t deserve to get subsidy and that’s the truth.”

He further argued that consumption of kerosene is not static. This, he explained, made it imperative for relevant agencies to carefully scrutinise the differentials contained in the subsidy regime.

To buttress his point, he said, “If a woman cooks four pots of soup on Monday and she cooks only two on Tuesday, the kerosene she would use can never be the same.

“If that’s the case, then, it’s not easy to appropriate for subsidy. What I believe we should do is to stop the illegal deductions.”

Paulker called for improvements in the public transport system across the country to cushion the effects of deregulation on the common man.

Chairman of the Senate Committee on Works, Senator Ayogu Eze, said, “The whole issue of subsidy is akin to having a bull in a China shop.” He asked the Senate to “stop a few people from collecting the subsidy.”

While contributing to the debate, Senator Isa Galaudu noted that kerosene could actually be cheaper than petrol, if left to the forces of demand and supply.

Senator Bukola Saraki, in his contribution, drew the attention of his colleagues to the fact that both the finance minister, Dr. Ngozi Okonjo-Iweala and her counterpart in the petroleum ministry, Deizani Allison-Madueke, admitted before the Senate Committee on Finance, that the money used for the subsidy payment was neither appropriated for nor approved.  This, he said, was the crux of the matter.

The Chairman, Senate Committee on Finance, Senator Ahmed Makarfi, noted that the confusion over the subsidy on kerosene actually emanated from the two chambers of the National Assembly.

He explained that the House of Representatives and the Senate in different resolutions had given conflicting directives on kerosene subsidy.

He said, “One of the documents submitted by the NNPC to support kerosene subsidy was a motion by the House of Representatives that they should sell kerosene at N50 per litre and there’s another from the Senate that they shouldn’t sell at N50 per litre.”

Makarfi, a former Governor of Kaduna State, further noted that there were expenditures that the NNPC incurred on behalf of government which must be defrayed at source.

Senate Leader, Victor Ndoma-Egba (SAN), reminded his colleagues that the powers conferred on the National Assembly to appropriate were very clear; likewise the power for oversight over the executive, which he said was “at the core of legislative responsibility.”

Ndoma-Egba said the legislature should not cry foul “when such lacuna are exploited having abdicated its constitutional responsibility to oversight the executive through clearly spelt-out constitutional provisions.”

He said, “If somebody spends without pointing it out, then, it means the National Assembly is complicit, and this is a call to duty.”

Deputy Senate President Ike Ekweremadu, who presided over the session, said the Senate was “actually on the right path in asking the right questions on the funds.”

The Senate, contrary to Omoworare’s only prayer in the motion, calling for the immediate suspension of the subsidy regime, however, directed the finance committee to unravel the status of the kerosene subsidy in its investigations of an alleged unremitted $49.8bn crude oil proceeds.

The senators nevertheless agreed that subsidy, as it is presently run, should not be to the benefit of the privileged few at the expense of the majority.

Although the debate was heated at some point, Senators agreed that the NNPC had a lot of explanations to give on the kerosene subsidy mystery. It was the considered opinion of most Senators that the NNPC should account for every naira it allegedly claimed to have spent on kerosene subsidy.

The nationwide protest, which trailed the January 1, 2012 partial removal of subsidy on petroleum products, remains fresh in the minds of most Nigerians. Any attempt to remove subsidy now is likely to be met with the same level of resistance by Nigerians.

If the arguments on the floor of the Senate are anything to go by, the last is yet to be heard on what should happen to the controversial subsidy regime not only on kerosene, but all petroleum products.