Govs Demand Deregulation of Petroleum Products’ Prices

Chuks Okocha and Ibrahim Shuaibu

23 June 2011

Abuja/Kano — The Nigeria Governors’ Forum (NGF), arguably the most influential political block in the country, has asked President Goodluck Jonathan to take urgent steps to dismantle the current regime of subsidising petroleum products to pave the way for full deregulation of the sector.

The governors, in a communiqué signed by the NGF Chairman, Governor Rotimi Amaechi, demanded an “immediate removal of petroleum subsidy” to enable the states to access the N500 billion that the Federal Government spends annually on subsidy.

In their argument, the N500 billion would go a long way in their quest to implement the Minimum Wage Act.

THISDAY gathered from one of the governors from the North-west that the NGF’s decision to call for the immediate removal of the petroleum subsidy and implement total deregulation of the sector was informed by the discovery that the Federal Government spends a minimum of N500 billion yearly on petroleum subsidy.

According to the governor, “Through the payment of the N500 billion as subsidy to the petroleum sector, it is expected that this money goes to the Petroleum Equalisation Fund (PEF), but we are not sure that this is the case. So, it is better that the N500 billion used by the Federal Government to subsidise the sector is removed.

“If this money is removed, then it will be shared and it will go a long way to help our case in paying and implementing the Minimum Wage Act.”

Amaechi, who is Governor of Rivers State, said after the meeting that held at the Rivers State Governor’s Lodge Abuja, on Tuesday night, that the governors acknowledged that the minimum wage of N18,000 through the Minimum Wage Act was a valid law.

He however said: “Implementation will pose considerable challenge to a number of states,” adding that the governors therefore resolved to engage “labour in a holistic manner so that they can jointly agree to a common implementation framework.”

The governors, in the communiqué, also called for the review of revenue allocation formula and the constitution of a committee to determine the financial implications and work out the implementation details.

The governors also said they would set up a committee to examine the realities of the Minimum Wage Act imposed on states and its implication for the workers.

Amaechi had a fortnight ago told newsmen that the governors were not against the payment of the minimum wage, but added that a pre-condition for the implementation of the law would be an amendment of the current revenue sharing formula.

“What we are saying is that the money is not just there to implement this. It is a bit challenging because there are states that have a monthly budget of N1.5 billion, N2 billion and so on,” he had said.

According to him, “That is why I support the report of an ad hoc committee on revenue sharing formula headed by the Lagos State Governor Babatunde Fashola (SAN) that certain money should go to the Federal Government and states because I know that it will be a huge, huge challenge for some of my colleagues to pay this, except there may be no developmental projects.”

At present, the Federal Government takes 52 per cent of all federal revenues, leaving the states and local councils with the remainder of 48 per cent.

As things stand today, there are fears that the organised labour in the country is not happy with the seemingly foot-dragging posture of the state governments on the matter. There are indications that the leadership of the Nigeria Labour Congress (NLC) in many parts of the country is poised to take on the states to ensure that they comply with the Minimum Wage Act with regard to the payment of the N18,000.

However, to stave off a possible face-off, many states have begun to engage the labour leaders using the current state of their revenues as arguments why it would be difficult for them to meet the demands of the workers.

On security, the governors condemned in strong terms, the recent spate of bombings across the country and asked the Federal Government to invest heavily in intelligence technology. They also resolved to decisively address the security challenge through dialogue.

AllAfrica – All the Time