News

‘I DON’T KNOW WHAT FUEL SUBSIDY MEANS’ – BUHARI

May 24, 2015

410

In a
new interview with Daily Trust, President elect, Buhari expressed reservations over claims
by the government of subsidizing the petroleum sector. He spoke on how during
his time as Military leader, they were able to make fuel available at all
times. Below are excerpts of what he said in the interview

One burning issue is fuel subsidy. I believe you
are aware of the queues in major cities like Lagos and Abuja. The fuel
importers say they are unsure of the direction of the new government in this
area. Have you considered maintaining or withdrawing this subsidy or are you
questioning whether it didn’t exist at all?

One of the problems I have,
other than the military, is the petroleum industry where I served for three and
a half years under General Obasanjo. When people start talking about this
subsidy I honestly get confused. I will tell you this, and I hope it will
answer what you want to know. Back then we had a refinery in Port Harcourt,
which was refining 30,000 barrels a day of Nigerian crude. Later, it was
upgraded to refine 100,000 barrels a day.

Another refinery was built in Port Harcourt to
refine 150,000 barrels per day of Nigerian crude. So, Port Harcourt alone had
the capacity to refine 250,000 barrels per day of Nigerian crude. But when I
found myself as the Minister of Petroleum I set up another refinery in Warri
for 100, 000 barrels per day of Nigerian crude and the Kaduna refinery a 100,
000 barrels per day. So Nigeria built capacity to refine 450,000 a day. Four
Hundred thousands of which is purely Nigerian crude, but 50,000 was imported. The
type of crude could be Venezuelan, which could be a bit heavier. But the
lighter ones – kerosene, aviation fuel, diesel, PMS of different grades could
be produced from our crude because Nigerian crude is about the best in the
world. If you could recall, after finishing as Minister of Petroleum, I
subsequently became Head of State.

You remember, I appointed Professor Tam David
West as the Minister of Petroleum. When we rounded up bunkers, collected their
illegal jetties and allowed jetties for only big firms which were doing
production and development in the country, we were shocked that we had too much
fuel. We had to begin to export 100,000 barrels per day. Don’t forget that we
didn’t stop at building refineries, we built more than 20 depots during my time,
from Port Harcourt to Ilorin, Makurdi, Suleija, Maiduguri and Kano. More than
3,000 pipelines were laid to connect them. A number of stations were also built
to take the trailers off the road, save lives and the infrastructure on the
road. It is more economical because each trailer uses fuel.

We did all that in this country and we didn’t
borrow any money as far as I know. It’s Nigerian money. From each Nigerian
crude, whether Akwa Ibom, Bonny Light or whatever it is, you can work out how
much products it will give you; how much petrol it will give you; how much
diesel it will give you if you want to produce diesel. We could tell how much
Nigerian crude cost, the cost of transportation from there to the refinery, the
cost of refining, the cost of transportation to the pump stations and maybe 5
per cent go for overhead. I can understand if Nigerians pay for those cost but
somebody is saying he is subsidizing Nigerians. Who is subsidizing who?
But they argue that the price should not be
the same in Lagos and Daura, for example?
It has to be the same because it is the Nigerian
crude.

But they consider the cost of
transportation?
Why didn’t it make any difference when we were
around? Why did we build the network of pipelines? Why did we build the network
of depots? What can Nigerians benefit from the God-given gift of petroleum? No
refinery is built unless there is an in-depth research that there is enough
reserve of up to six layers to be produced.

The argument I have heard is that refineries
are aged. Mostly, they are performing at less than half of their capacity…?
You can’t defend these corrupt and incompetent
people. You can’t defend them. There used to be what they call
turn-around-maintenance. You close the refinery in order to overhaul and clean
it. What we did: we asked our producers, we need various refined products of
this type at this time when the refineries are being cleaned. Take this type of
Nigerian crude and bring us the refined products. What we don’t need, we will
calculate and pay you as fees for refining and transportation. If it is more
than what the crude can handle, then we take it from the treasury. But you are
trying to justify all these frauds by saying the refineries are aged.

Of course, they are actually aged?
They said the refineries are aged. The pipelines
are leaking. There is vandalisation. Who ordered the vandalisation?

Does it suggest that you don’t believe in the
subsidy? So, you are not going to
agree to its continuation in anyway?
I would like to be on ground and find out what
really has been going wrong. Why is it that people are doing round-tripping
with the Nigerian products and take money from the treasury? Some people are
still in court. You know about it. So, I’m not taking anything for granted. But
I will try and find out what went wrong.

THE FULL INTERVIEW BELOW:

My heart thumped from anxiety and my eyes turned in a cursory survey of the environment as our vehicle came to a halt for security checks at the Daura residence of President-elect Muhammadu Buhari. The fresh white coat of paint on some two hundred metre-long fence gave an inkling of an uncommon excitement in the atmosphere. Close to the assorted security operatives at the security post was a motley crowd of peasants. They defied Daura’s hot and hurting afternoon sun which tore through the pores of the skin, forced out excess sweat and soaked their clothes. In contrast to the discomforting atmosphere, the peasants’ pleasant faces spoke of the good news in Daura – a homeboy had won the big prize of president of Nigeria. As our vehicle drove into the premises, the instant attractions were the tall trees, long branches and blossoming leaves. They provided the rare comfort that soothes the body from the harsh sun outside. Below the trees were the well-kept grasses.

The president-elect’s bungalow is caught in this array of trees, shrubs and a beautiful spread of flowers. A bungalow? It was the loud rhetorical question that protested in my head. A former Head of State of an oil-rich country, a former Minister of oil-soaked Ministry of Petroleum, a former Governor of a rich State, and former Chairman of oil-whet Petroleum Trust Fund (PTF), only boasting of a humble bungalow? Nothing prepared me for this unspeakable shock. A simple bungalow – porch, waiting room, living room, dining, and another adjoining structure that looked like bedrooms. We were ushered into the living room to meet the president-elect reading the day’s dailies and sipping green tea in a light and relaxed mood. I had expected to meet a worried president-elect, but alas, Buhari intermittently laughed, smiled, cracked jokes, told historical tales in a lively and exciting manner. He wouldn’t allow the impending task to weigh down his spirit. Even when my Editor-in-Chief, Malam Mannir Dan-Ali, attempted to sympathise with him by saying not many would envy him as a result of the myriad of problems in the country, the president-elect quickly responded thus, “I think you’re wrong. Many people envy me…” We rolled on our cushion chairs in loud laughter. From this kind of simplicity and confidence, we’re set to be led by a president who is not wealth-crazy.

At the end of the two-day encounter with Buhari, one impression trailed us from Daura to Abuja on the 7-hour journey – the fact that the 72-year-old famous son of Daura is mentally and emotionally ready for the top and tough job of running Nigeria. An appendage to that impression is that as from May 29, things will be done differently. There’s certainly going to be a shocking paradigm shift. And a shaking shift might begin at the tick of the clock that would announce Buhari’s takeover of the high chair. This interview provides an insight into his thoughts and values.

. I’ll give my ministers targets

. I’ll ensure separation of power

If we take what President Jonathan said recently, it’s like you are going into another detention. He said he was living in a ‘cage’ for 15 years, and here you are elected to be in the ‘cage’, in his words, for the next four years. Do you look forward to it or are you like approaching it with trepidation, with concern, especially with the expectations from Nigerians?

I asked for it, so whatever I meet there I cannot complain. I came out and went through the election processes with the party and so on, and I know, of course, that there is a lot of work to be done. The important thing is to make sure that the structures on ground are made to function and people are made to do their work and develop the capacity to supervise. I think that is all I can do because, on the question of efficiency, I don’t think there will be any compromise on that. If you reflect on the 16 years of the PDP, I think, it was 16 years of disaster, especially economically and security wise. Economically, if you find out how much the country earned and the state of the infrastructure at the beginning and the state of infrastructure now, then it becomes unfortunate that we found ourselves under the rule of the PDP in this country. So whoever becomes part of the cabinet should be prepared to work. Deliberately we will look for competent people, dedicated and experienced persons to head ministries. Of course, there will be schedules for ministers and we will expect them to fill them.

Economically, we will try and stop a lot of wastages and encourage austerity so that we can fund the ministries. Education and healthcare will get more attention. Of course, security is Number One. Certainly, there is a lot to do but we are hoping that we will get good people to be in charge of ministries who can apply themselves to their responsibilities so that before long Nigerians will begin the see the difference.

Do you have an outline of the cabinet you spoke about, these competent people? Have you identified the actual people who will man these different places because the expectation is that you will hit the ground running?

I am not just speaking about it, I have not put anything on paper, so nobody has seen it and I haven’t discussed it with anybody. I am just keeping it close to my chest.

But do you have an outline?

I have been around long enough to know people that I can approach for things like that.

But it will be like in the first week of the proclamation of the new legislature you will have this cabinet presented?

I will not make that known before you.

Previously ministers were appointed from the political class, especially during the PDP era the governors would say this is my favourite candidate, he is representing my state and when he is in the cabinet he is the eye of the governor representing the opinions of the governor. Are we going to have that or are we going to see a system that will focus on only those who are going to work?

Well, I am ardent listener to the Hausa Service of the Voice of America (VOA) and the British Broadcasting Corporation from 6am to 7am every morning. I am going to quote myself because I heard in one of the interviews I said the type of people I am supposed to appoint, like in the cabinet and the Secretary to the Government of the Federation, and Service Chiefs will be different from how the PDP appointed its. Definitely the system is going to be different from what we had under the PDP where governors nominated ministers.

Already, there are speculations about this post is zoned to that part of the country and all of that. I don’t know what is your take on this?

Yes, thank you very much for calling it speculation because that is what it is. What I know is that there was an issue of APC National Working Committee meeting and I think they zoned positions in that meeting. The first time I heard about it was from the chairman of the party who is the chairman of the national working committee. He just came to greet me as the president-elect when somebody leaked it to the press. So I kept my mouth shut and allowed them to continue with the speculation.

Probably, because you have been saying the supremacy of the party should be respected?

That doesn’t mean that the supremacy of the party should tamper with courtesy to whoever is the elected president of the country. There is nothing wrong with the exercise they have done. They haven’t named who are to be in the offices they have been zoned. It is a matter of courtesy for us to discuss it before you allow it to leak to the press. But if you allowed it to leak to the press then it becomes a matter of speculation.

Is that why you came out to say you didn’t want to determine who becomes the Senate President or Speaker?

No, the party has been meeting and I don’t want to interfere with what the party is doing. The National Assembly has its own standard of picking its leadership and it is not for me, the president-elect, to come and pretend that whatever happens it is I, the president-elect, who should determine it. I don’t want to start on the wrong footing with the National Assembly.

Constitutionally, we are three separate arms of government – the executive, the legislature and the judiciary. For example, I cannot say that once I am sworn-in I will change the set of the Supreme Court judges. It is not possible. Neither is it possible for me to come out and I say I want this person for Senate President or I want that person to lead the House of Representatives. I think it is wrong and I cannot come out to support anybody for the leadership of the legislature because they have their ranking, as they call it.

What was the reaction of party leaders when you said that?

Well, how can they react to what is a proper way of doing things? I can have my individual opinion about the people who will occupy the offices. I know that some people imposed the leadership of the National Assembly and it didn’t work well for them, so I shouldn’t be making the same mistake.

One burning issue is fuel subsidy. I believe you are aware of the queues in major cities like Lagos and Abuja. The fuel importers say they are unsure of the direction of the new government in this area. Have you considered maintaining or withdrawing this subsidy or are you questioning whether it didn’t exist at all?

One of the problems I have, other than the military, is the petroleum industry where I served for three and a half years under General Obasanjo. When people start talking about this subsidy I honestly get confused. I will tell you this, and I hope it will answer what you want to know. Back then we had a refinery in Port Harcourt, which was refining 30,000 barrels a day of Nigerian crude.

Later, it was upgraded to refine 100,000 barrels a day. Another refinery was built in Port Harcourt to refine 150,000 barrels per day of Nigerian crude. So, Port Harcourt alone had the capacity to refine 250,000 barrels per day of Nigerian crude.

But when I found myself as the Minister of Petroleum I set up another refinery in Warri for 100, 000 barrels per day of Nigerian crude and the Kaduna refinery a 100, 000 barrels per day. So Nigeria built capacity to refine 450,000 a day.

Four Hundred thousands of which is purely Nigerian crude, but 50,000 was imported. The type of crude could be Venezuelan, which could be a bit heavier. But the lighter ones – kerosene, aviation fuel, diesel, PMS of different grades could be produced from our crude because Nigerian crude is about the best in the world.

If you could recall, after finishing as Minister of Petroleum, I subsequently became Head of State. You remember, I appointed Professor Tam David West as the Minister of Petroleum. When we rounded up bunkers, collected their illegal jetties and allowed jetties for only big firms which were doing production and development in the country, we were shocked that we had too much fuel.

We had to begin to export 100,000 barrels per day. Don’t forget that we didn’t stop at building refineries, we built more than 20 depots during my time, from Port Harcourt to Ilorin, Makurdi, Suleija, Maiduguri and Kano. More than 3,000 pipelines were laid to connect them. A number of stations were also built to take the trailers off the road, save lives and the infrastructure on the road. It is more economical because each trailer uses fuel.

I can understand if Nigerians pay for those costs. But somebody is saying he is subsidizing Nigerians. Who is subsidizing who?

But they argue that the price should not be the same in Lagos and Daura, for example?

It has to be the same because it is the Nigerian crude.

But they consider the cost of transportation?

Why didn’t it make any difference when we were around? Why did we build the network of pipelines? Why did we build the network of depots? What can Nigerians benefit from the God-given gift of petroleum? No refinery is built unless there is an in-depth research that there is enough reserve of up to six layers to be produced.

The argument I have heard is that refineries are aged. Mostly, they are performing at less than half of their capacity…?

You can’t defend these corrupt and incompetent people. You can’t defend them. There used to be what they call turn-around-maintenance. You close the refinery in order to overhaul and clean it. What we did: we asked our producers, we need various refined products of this type at this time when the refineries are being cleaned. Take this type of Nigerian crude and bring us the refined products.

What we don’t need, we will calculate and pay you as fees for refining and transportation. If it is more than what the crude can handle, then we take it from the treasury. But you are trying to justify all these frauds by saying the refineries are aged.

Of course, they are actually aged?

They said the refineries are aged. The pipelines are leaking. There is vandalisation. Who ordered the vandalisation?

Does it suggest that you don’t believe in the subsidy? So, you are not going to agree to its continuation in anyway?

I would like to be on ground and find out what really has been going wrong. Why is it that people are doing round-tripping with the Nigerian products and take money from the treasury? Some people are still in court. You know about it. So, I’m not taking anything for granted. But I will try and find out what went wrong.

Has your transition committee broken the seeming disconnect with the outgoing government? We hear there isn’t a lot of communication between them?

Yes. The normal thing is that we are looking forward to having the benefit of discussing the issue with the President and General Abdulsalami Abubakar. General Abdusalami gave us the benefits from his experience when he was handing over to Obasanjo.

After he discussed it, I thought about it as an incoming President. And I said what I will to do, perhaps, is that President Goodluck Jonathan should please ask his ministries to prepare their handover notes. Then, I will have an inter-management committee. Each ministry will go and make a presentation and deposit a number of copies of the documents. The politicians know that they are going. But the technocrats know that they are staying back, that is permanent secretaries and those below them in each ministry.

If they wrote rubbish and gave it to us, the people we put in the committee are known in this country, so they will help. They will prepare notes for us so that we will have facts. But, unfortunately, I read in the press that the government said we had constituted a parallel government. So, as far as I’m concerned, the government is not cooperating with the committee.

My transition committee, being a group of very experienced people, divided themselves into sub-committee. They used resource persons to get to where they wanted. This is the stage we are. So, I don’t know how far they have gone because they are about to brief me. When I go back to Abuja, they will brief me.

Will their recommendations be part of what you will consider in setting up your cabinet?

I don’t think it has anything to do with the cabinet. What I did was to try to look for technocrats and few politicians who, by their experience, have dealt with government in various stages, whether it is finance, petroleum, administration, foreign service and so on.

When they come to brief them, at least, they will identify what they are going to talk about.

Why is it that your own meetings with President Jonathan are too short? You spent like 30 minutes.

It’s not up to 30 minutes. It’s not more than 15 minutes, except that with General Abdulsalami.

But you have so many problems to discuss…?

But I have to know what to discuss. If I’m denied the opportunity to know the problem, what do I discuss? If the ministries presented their handover notes or whatever, it is to the interim committee; the committee will be able to quickly go through it and produce a summary, which I would have been able to read.

I could have spent time with the president. But when I don’t know what is happening, what do I discuss?

One of the problems you are going to inherit is power sector. How are you going to tackle it? Some people are saying that the privatization exercise should be reversed. Is there any special approach you want to adopt?

I can’t tell you any approach we are going to adopt until I get on the ground. It is only when I get to know where we are that we can start moving to where we want to be.

But some people will say that it is already public knowledge. For example, we learnt recently that power had plummeted by 800 megawatts. Don’t you realize that some people will wonder why it takes a long time for you to even understand, maybe, what is going on, having taken over power?

I believe the best way to approach it is to tell the Nigerian public what we have taken over. Tell them the truth and then we ask for their understanding and support to allow us see how quickly we can improve issues, especially power and security (which are part of campaign promises) economy, employment and infrastructure. Infrastructure and power are very important.

If you can get the power issue right, entrepreneurs, perhaps, will break even. This means factories will start re-opening. There will be employment. There will be goods and services because many factories will improve.

I think this is common sense. One doesn’t have to go to any university and study Economy. We don’t have to spend quite a number of time to make people understand the position we are in. They know it. They have experienced it. They have seen how their land deteriorated in the last 16 years in spite of the resources the country is getting.

Would you encourage the Distribution Companies (DISCOs) and other segments to go to the Nigerian Stock Exchange (NSE) for transparency?

I insist on knowing what is on the ground before I can make any commitment.

That means the reversal of privatization may be on the card…

No. Nothing is on the card until I see what is on the ground and I tell Nigerians what it is. But by that time, we would have had a cabinet. We would certainly present our paper to the cabinet. Then, the implementation will start.

With the lack of cooperation on the part of the outgoing government, are you waiting until May 29 before you get full grip of the state of affairs?

I asked them. But I was made to understand that they will brief instead of handing over the notes to the Interim Management Committee on May 21. This is what I heard. I read it in the papers.

You read it in the papers. Is there no formal communication between the incoming and the outgoing government?

What I want you to understand is that I’m not going to make any commitment before seeing the documents and understanding its content. What is the basis for my talks when the facts are not available?

Maybe they don’t think that they should give you the documents?

But, constitutionally, they just have to go. Whatever they will leave behind, we will try to make best use of it.

I don’t know whether you are worried about the issue of the cash crunch. You have been there before. Salaries are not being paid. From what the Minister of Finance is saying, the Federal Government had to borrow money. The foreign reserve has gone down. It’s just like the 1984 scenario is being repeated when you came into salvage the situation. What are your thoughts concerning this situation?

My thoughts have to be about what we find on the ground. Of course, the figures are coming out. There is a depletion of what they call Excess Crude Account (ECA) and national reserve.

From the time when Obasanjo handed over to the late Umaru Musa Yar’adua, maybe it’s about $100 million. May be it is $25 million now, in spite of what we are getting. So, we have to see what is on the ground. Again, I have to go back to them. I read from papers that about 22 states couldn’t pay salaries.

Even the military and the police were not paid until the second week of the following month. So, there are revelations that are coming out. I cannot base what I will do on those complaints until I see what is in the treasury and what is in the pipeline. That is the reality of the situation.

The outgoing government is busy appointing and sacking people. In 1979, when Obasanjo was appointing some Justices to the Supreme Court, there were consultations with the then incoming Shagari government. Is there any consultation with you?

To the best of my knowledge, I was not consulted. But the case of AfDB, I took it up because it’s an international appointment. And I would like Nigeria to gain.

Though Akinwumi Adesina is a Peoples Democratic Party (PDP) government minister, I want Nigeria to get this appointment, which will be of benefit to us as a nation. I sought the support of some Nigerians who are close to us, like the former Vice President Atiku Abubakar, who is a friend to South African President.

I asked him to take Adesina along with him to President Jacob Zuma. I personally spoke with the Vice President. South Africa will be voting at the AfDB. We need them to support Nigeria. This is a Nigerian issue. I keep our local issue at bay. But when it comes to international ones, I try to do my best.

What will you do differently on the issue of security from Day One because there is a slight resurgence of Boko Haram activities?

There will be service chiefs. It will be interesting to see what they put up and leave for us.

You will wait until May 29 before you decide how to tackle the insurgency?

What can I do?