President Goodluck Jonathan and Peoples Democratic Party leaders may clash over the President's fresh plan to remove fuel subsidy.
Saturday PUNCH's investigation revealed that the leaders were worried that Jonathan was taking a dangerous gamble, especially at a time when some opposition parties' were planning to fuse into the All Progressives Congress.
PDP leaders, who spoke to one of our correspondents on condition of anonymity in Abuja on Thursday, said the removal of fuel subsidy would compound the party's woes ahead of 2015 elections.
They said doing so now would amount to committing "political hara-kiri" for the party.
The President had at a summit in Lagos on Tuesday said the Federal Government would remove the subsidy because it was benefitting the 'affluent middle class'.
But some PDP National Working Committee members said they would advise the President not to toy with the issue because of the 2015 elections.
"This is not the right time to talk about that. The opposition is lurking around to take power from us and that (increase fuel price) would be a tenable excuse and a campaign slogan against us in 2015.
"We will not encourage that. Anything on that may have to wait till after 2015. We don't want to incur the wrath of Nigerians.
"If the President increases the fuel price now, there is no way we will manage its fallout that it will not affect our fortunes in the 2015 elections," an NWC member said.
He said the statement made by the President was a 'futuristic one' and not immediate, adding that there was no way the President would be talking about a hike in petrol price now with the security challenges facing the country.
"I think we should not dwell on this too much. The President was talking about future subsidy; anything sort of that is being misinterpreted," the source added.
He said the President had yet to inform the party about the plan, adding that if he brings it up, PDP leaders "may not support it."
Efforts made to obtain comments from the PDP National Publicity Secretary, Chief Olisa Metuh, were not successful as he did not respond to calls made to his mobile telephone.
Saturday PUNCH also learnt that some of the President's aides and associates were not comfortable about the issue.
A close associate of the President said there were worries that Jonathan was having too much bad press in spite of some of the feats recorded by his administration.
The associate said there were fears that a fresh hike would pitch Nigerians against the President and could be used by the opposition against him and his party in upcoming elections.
It was gathered that while it is the prevalent view in the Presidency and top PDP officials that the subsidy should go, they have delayed taking on the subsidy issue because of the implications of a mass opposition to it by Nigerians.
A Presidency source told our correspondent that although the present administration was committed to completely removing fuel subsidy, the decision may not take effect this year.
The source, who pleaded anonymity, said the President has resolved to ensure that all Nigerians were properly sensitised before the complete deregulation of the downstream sector. This is meant to avoid the backlash that followed a similar attempt in January 2012.
He said, "Money for fuel subsidy is captured in the 2013 Budget. That is a clear indication that the full deregulation may not take place this year.
"The brief received by the President from the Ministry of Information was that most Nigerians are not opposed to deregulation. He (the President) was told that what Nigerians were against was the timing of the deregulation in January 2012.
"This same information was repeated by Labaran Maku (Minister of Information) while briefing the Federal Executive Council of the achievements and challenges of his ministry in 2012 on Wednesday.
"The point is that the President has made it clear many times that subsidy must go but what we cannot say for now is when it will go."
Special Adviser to the President on Media and Publicity, Dr. Reuben Abati, could not be reached for comments at the time of filing this report as he was on the President's delegation to Malabo, Equatorial Guinea.
Meanwhile, the Federal Government's fuel subsidy account, domiciled with the Central Bank of Nigeria, has yet to be funded by the Federal Ministry of Finance, three months into the 2013 fiscal year.
Investigations by one of our correspondents on Thursday revealed that the inability of the ministry to fund the account was responsible for the huge debts owed marketers for fuel subsidy.
It was gathered that about 43 marketers are currently being owed over N100bn for fuel subsidy.
Our correspondents learnt that marketers had not received payment for petroleum products imported into the country for the fourth quarter of 2012.
It was also gathered that they had not received payments in 2013, making a total of six months.
Findings by our correspondents further revealed that some of the marketers who were issued Sovereign Debt Notes by the Debt Management Office to settle outstanding fuel subsidy claims, had yet to be paid by the CBN.
The SDNs, which were issued on March 8 by the DMO, had a maturity date of January 3, 2013.
It was stated that the delay in issuing the SDNs were deliberate attempts by the finance ministry to delay the payment of fuel subsidy claims to marketers.
For instance, one of our correspondents learnt that the 45-day period to process the payment of subsidy after the date of importation had been abandoned.
A top official of the ministry of finance, who did not want to be named, confirmed these developments.
The official, who pleaded not to be named owing to the sensitive nature of the matter, said the mounting subsidy claim was a huge burden to the Federal Government.
He said, "The marketers were issued SDNs on March 8, having a maturity date of January 3 for us to go and convert into cash. But when we got to the bank, they were told that the fuel subsidy account had not been funded.
"They are disappointed now because no one is telling them anything. It is sad because an instrument that is supposed to be a promissory note is now a big burden to them."
Also, investigations showed that the Federal Government was owing the Nigerian National Petroleum Corporation N1tn subsidy claims.
A senior official of the corporation told one of our correspondents that though the NNPC may not have much information as regards the issue of subsidy, the Federal Government was "heavily indebted to it."
Asked about the actual sum which the government was owing the corporation, the source, who pleaded not to be named, due to the sensitive nature of the matter, said, "The Group Managing Director of NNPC has said it several times. I don't have the actual figure now, but I know it's over N1tn."
The level of government's indebtedness to the corporation had also hampered its smooth remittance of funds to the coffers of the Federal Government. The corporation stated that it was surprised to be summoned by the House of Representatives Committee on Finance, on the grounds that it was indebted to the Federal Government to the tune of N147.2bn.
The source added, "In our first statement, we did say we believe that the chairman of the House Committee has a different agenda from what they were sent out to do. A committee was set up by the chairman of the House Committee comprising people from the Accountant General's office, from the very committee that he (the chairman) is heading and also the secretary of the committee to come to the NNPC and look at our books. They came and were still working when he went to town to say what he said."
Also speaking on the development, an oil marketer who craved anonymity, said the way the subsidy regime operates, there was no way the government would not be owing marketers at any point in time.
He said, "That is the way the sector is structured. However, at a particular point in time, within 45 days after the treasury papers are collated, government can give a go-ahead. But the Debt Management Office might say they do not have the cash backing and this, of course, causes some form of concern.
"Government may ask the DMO to pay but the debt managers may say they don't have money to pay. And nobody will want to face government, because the way the sector is structured, one way or the other everybody is government. So nobody wants to come out in the open to say this is what government is doing that is bad."
He noted that once subsidy is withdrawn completely from fuel, the cost of bringing in the commodity will increase. "This is the reason why marketers are calling for the deregulation of this sector, because it will give us the ability to bring in products at market rates that will be affordable enough," the source added.
The Minister of Finance, Dr. Ngozi Okonjo-Iweala, could not be reached for comments as she was said have travelled out of the country.
Commenting on the subsidy controversy, the Executive Secretary, Jetty and Petroleum Tank Farm Owners of Nigeria, Enoch Kenawa, said going by the Federal Government's indebtedness to oil marketers, the N971bn budgeted for fuel subsidy in the 2013 fiscal year would not be adequate.
He stated that based on the current consumption pattern, the amount would not be enough to guarantee adequate supply of petroleum products.
The N971bn subsidy budget for 2013 is N83bn or 9.35 per cent higher than the N888bn for 2012.
He said a full deregulation of the sector, which would pave the way for an effective pricing regime, was the only viable way to address the problem in the sector.
If the sector is deregulated, Kenawa stated that Premium Motor Spirit would be sold for between N140 and N145.
He said, "We don't have objection to removal of fuel subsidy but what we are saying is that there should be an effective regulator to regulate the market.
"What we have now is people sell at different prices but what we need is an effective regulator that would enforce a price ceiling for the product.
"Based on the landing cost, fuel would sell for between N140 to N145 when fuel subsidy is eventually removed.
"If the government removes fuel subsidy you will see companies setting up refineries in this country and once that is done, petrol would drop to between N120 to N125 depending on the proximity to the refineries."
But a source at a strategic department in the NNPC said that the new subsidy regime was dependent on the value of the Naira.
The source put the new price regime at between N138 and N142 per litre, which was said to be within the range of the landing cost of the product.
It was added that it would be difficult to determine the exact pump price if the subsidy is removed because of the unstable nature of the exchange rate of the Naira to the dollar.
