The National Working Committee (NWC) of the All Progressives Congress (APC), on Thursday met with the party’s State executives and a high-level Federal Government delegation led by Babachir David Lawal, Secretary to the Government of the Federation (SGF), on the newly introduced petroleum products supply and pricing framework.
Attendees at the meeting, held at the APC National Secretariat, included Chief John Odigie-Oyegun, APC National Chairman; Minister of Information and Culture, Lai Mohammed; Minister of Education, Mallam Adamu Adamu; Minister of Labor and Employment, Dr. Chris Ngige; APC Deputy National Chairman (South), Segun Oni; APC Deputy National Chairman (North), Senator Lawal Shuaibu; APC National Treasurer, Bala Mohammed Gwagwarwa; APC National Organizing Secretary, Senator Osita Izunaso; APC National Auditor, George Moghalu, APC National Youth Leader, Ibrahim Dasuki Jalo; and National Financial Secretary, Tajudeen Bello.
Mr. Odigie-Oyegun, who heads the party's NWC, described the meeting as a unique because it was conceived to ensure that the party and the government are on the same page on very critical issue affecting the country.
"The main benefit, of course, is that we want a situation where party leaders from all over the country do not form their opinions on the basis of newspaper publications because you are at the heart of governance.
"At the end of the month, we are also going to have what we term as a policy dialogue, which is already approved by all layers of governance in the party. The policy dialogue will involve at least five leaders from the thirty-six States of the Federation including the Federal Capital Territory (FCT) to sit with the executive branch," Odigie-Oyegun said.
The APC Chairman also said at every subsequent retreat, the party will invite five members from the executive arm of government to explain the situation they inherited, how they have been affected, and what they envisage.
"What this does is arm every one of us from the national level and State level so that we can speak authoritatively about what is going on at the national level and go away with the conviction that things are not just happening capriciously," he enunciated.
Mr. Lawal, the SGF, reminded the meeting that the APC-led government of President Muhammadu Buhari will be one year in office in 10 days. He said the APC was founded to be a consultative party.
"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 to at every step of the way consult quite a few of the key members of our party.
"One of the major decisions that the government has taken of 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," said the SGF, who described the meeting as a family discussion.
Information Minister, Lai Mohammed, explained to the gathering that liberalization is not about subsidy removal. He said no provision was made in the 2016 budget for subsidy, arguing that what was not in the budget could not have been removed. Mr. Mohammed added that last year alone, the Federal Government paid over N1 trillion in subsidy payment, the equivalent of one-sixth of the entire national budget.
"We agreed that we are not going to put subsidy [in the budget]. So, what we did was not a removal of subsidy but actually liberalization, 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," said the Information Minister.
Since last October, he added, 90 percent of imported fuel came in through the Nigerian National Petroleum Corporation (NNPC) because independent marketers could not import due to lack access to foreign exchange.
"We can't expect them to buy foreign exchange on the open market and sell at N86.50, so the NNPC had to step in not because NNPC also had foreign exchange.
"What the NNPC had been doing is that they had been exchanging the 445,000 barrels 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 per cent total daily consumption for the country.
"What the NNPC had been doing since October is dip into the crude meant for the federation account to supplement the DSDP," he explained.
The situation, Mohammed argued, deprived the federation account money that would have accrued to be shared by the three tiers of government. Last month, he said, the tiers of government shared N299 billion, the lowest in the country's history. He contended that the new framework would benefit Nigerians.
"Mr. President has tried every option and deregulation is in the overall interest of the poorest of the poor and I'll tell you why. Outside Lagos, Abuja, and probably Kano, where have we been buying [petrol] at N86.50?" he asked.
He argued that the first benefit for the masses is eradication of subsidy and all corruption associated with it. The new price regime, he added, also ensures product availability and makes government at every level much more viable.
"Crude belongs to a federation account, which the NNPC had been using to supplement the fuel system, which will cease. There will now be more money for the three tiers of government to share," he said.
Mr. Mohammed also reckoned that the new price regime will encourage more investment in refineries and in the downstream sector and that it will lead to creation of more jobs because of envisaged investment in refining.
"There will be more jobs and it will also save existing jobs. We can see a minimum of 200,000 new jobs being created and save an existing 400,000 jobs. Those are the benefits of this new price regime," he told the meeting.