We Must end Petrol Subsidy - Jonathan - Court says Deregulation Illegal

We Must end Petrol Subsidy - Jonathan - Court says Deregulation Illegal

President Goodluck Jonathan yesterday said government is still planning to withdraw petrol subsidies but that consultations will be held first to decide the best way to do it. Speaking at the Economist Magazine’s Nigeria Summit in Lagos, Jonathan said the subsidy regime is wasteful and corrupt, and that only the “affluent middle class” benefits from it.

We Must end Petrol Subsidy - Jonathan - Court says Deregulation Illegal

“Our investigation into corrupt practices in the fuel subsidy scheme has led to the recovery of large sums of money, and prosecution of suspected culprits,” the President said. “We cannot continue to waste resources meant for a greater number of Nigerians to subsidise the affluent middle class, who are the main beneficiaries,” he added.

Jonathan’s previous attempt to end petrol subsidies sparked street protests and national strike in January last year, forcing the government to partially reinstate the subsidy. Civil society groups and labour unions have vowed to resist any fresh attempt to withdraw the support regime, which will mean rise in petrol prices. When the Federal Government cut subsidies last year, petrol prices rocketed to nearly N200 per litre from N65 per litre.

The current official price per litre is N97. ‘Illegal, null and void’ Jonathan yesterday did not specifically say how the public consultations will be held ahead of the planned subsidy removal. But as he spoke in Lagos, a court in Abuja declared the deregulation of the petroleum industry as illegal. Government has insisted that deregulation will save billions in subsidy funds which would then be funnelled towards infrastructure development.

Delivering a judgement in a case instituted by Lagos-based private lawyer Bamidele Aturu, Justice Adamu Bello of the Federal High Court declared that the deregulation policy is unconstitutional, illegal, null and void. Aturu went to court challenging the 2009 decision of the government to deregulate prices of petroleum products in Nigeria.

He sought an order restraining the government from deregulating the downstream sector of the petroleum industry or from failing to fix the prices of petroleum products as required by the Petroleum Act and the Price Control Act. In the judgment, the court said the policy of deregulating the sector by not fixing petrol prices is unlawful. Justice Bello said government must always fix the prices of petroleum products sold across the country as stipulated in the Petroleum Act and Price Control Act.

The Attorney General of the Federation and the Minister of Petroleum Resources, who were joined as defendants in the suit, had argued that Aturu lacked the locus standi to institute the action and asked the court to strike it out. But the court said on constitutional matters, the law of public litigation allows Aturu to file the suit because the issues raised affect him and other Nigerians.

Justice Bello ruled that the deregulation policy is in conflict with Section 16(1)(b) of the 1999 Constitution which provides that the government should control the national economy in such manner as to secure the maximum welfare, freedom and happiness of every citizen on the basis of social justice and equality of status and opportunity.

“The policy decision of the defendants to deregulate the downstream sector of the petroleum industry by not fixing the prices at which petroleum products may be sold in Nigeria is unlawful, illegal, null, void and of no effect whatsoever being in flagrant violation of the mandatory provision of section 4 of the Price Control Act, cap P28, Laws of the Federation of Nigeria, 2004,” Bello said. “The recent dismissal of three judges found to have compromised their offices is an unmistakable signal of zero tolerance for corruption in the judiciary,” he added.

Jonathan said he was using a three-pronged pronged approach to tackling terrorism, including through strengthening of counter-terrorism cooperation with neighbouring countries. “Our second approach is openness to political dialogue. We believe, however, that this can only realistically progress when the groups and individuals involved in acts of terror, relinquish their anonymity, and come forward in sincerity to make their objectives known to the Nigerian people,” he said.

The third approach, the president added, focuses on economic inclusion targeting the disadvantaged especially in the North East, with economic opportunities in agriculture, entrepreneurial support, graduate employment and unskilled jobs programmes. The Economist Magazine Nigeria Summit is being held with the theme: “Enabling and Implementing Change.”

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