Fuel Subsidy: Jonathan To Use Executive Order

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President set to rely on legal advice

OPPONENTS of fuel subsidy may have lost the battle, going by the government’s plan to handle the combustible issue.


President Goodluck Jonathan and his cabinet have opted for Executive Fiat to remove the subsidy, The Nation learnt yesterday.

The government will not depend on any legislative instrument to back its action, a source said.

The withdrawn subsidy will be part of the 2012 budget being worked upon by the Minister of Finance, Dr. Ngozi Okonjo-Iweala.

The cash from this souce is to be ploughed into reviving the country’s decaying infrastructure. But the popular belief is that such an action will raise fuel prices and further impoverish the poor.

Dr Jonathan may have been emboldened to take the decision by the legal advice on the constitutional clauses which empower the Executive to withdraw the subsidy.

A cabinet member, who pleaded not to be named because of what he called the sensitivity of the situation, said the government will not go back on its decision to remove the subsidy.

The source said: “The government has decided to make the withdrawal of fuel subsidy a purely Executive matter; we will resolve this debate over the subsidy in the next few weeks with the 2012 Budget.

“There is no way we can manage 2012 Budget without removing fuel subsidy. It is central to the economic growth we are trying to accelerate.

“We felt it is better to take a painful but a necessary decision in the interest of the nation’s development and its future.

“This government will eventually be vindicated when Nigerians start feeling the effects of the removal of subsidy on education, roads, health, water and other infrastructure.”

Responding to a question, the cabinet source said: “Whatever is the decision of the Senate and House of Representatives on the withdrawal of fuel subsidy is advisory.

“Go through the 1999 Constitution, you will discover that the government is constitutionally empowered to take such a decision.

“Section 16(2) of the Constitution gives the government the backing to withdraw fuel subsidy because it is purely economic matter.

“The section says in part: ‘The state shall direct its policy towards ensuring (a) the promotion of a planned and balanced economic development; (b) that the material resources of the nation are harnessed and distributed as best as possible to serve the common good.

“That the economic system is not operated in such a manner as to permit the concentration of wealth or the means of production and exchange in the hands of few individuals or of a group …”

The source explained that the government has demonstrated faith by publishing the list of the beneficiaries of the fuel subsidy.

“The publication of the list has shown our commitment to unmasking the subsidy cartel and utilising the funds realised from the removal of subsidy.”

The Federal Government is proposing a N4.8trillion budget for 2012, with a $70 to $75 benchmark price for oil.

Apart from the take-off of the Sovereign Wealth Fund (SWF), the government is also proposing savings of about N1.2trillion from the withdrawal of fuel subsidy.

But most Senators and House members have asked their leaders to prevail on the President to meet four conditions.

The conditions are:

•a publication of the list of the beneficiaries of past fuel subsidy; 

•presentation of facts and figures or statistics on the true picture of the amount of fuel subsidy; 

•a comprehensive release of palliative measures Nigerians will enjoy, if the subsidy is removed, and Action Plan to make the measures work; and

•concrete work plan on how to make all refineries function at optimal level.

Source: The Nation

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