Moments after Nigeria Labour Congress and its allies served notice on the federal government to either revert to the pre-Wednesday price of N86.5 per litre or have a #OccupyNigeria on its hands, I went into the archives to fish out my earlier thought on the matter if only to demonstrate how very little has changed –in terms of the substance of the subject and citizens appreciation of the precarious times that the nation has found itself. The piece, published in November 24, 2015, titled – Subsidy- Time to let go, was itself an update of an earlier piece published on May 19, 2015. Never mind the well-worn fixations or the semantic exertions which they give rise, the issues have remained practically the same.
“The fuel queues are back – as if you didn’t know that already. The tragedy isn’t just that OPEC’s one-time sixth largest exporter of crude has again suffered another crushing relapse of the familiar plague of dry pumps – no thanks to the feud between fuel importers and the finance ministry – it’s like the nation has come under a spell of some ancestral curses!
Trust Nigerians for their inventiveness; guess they have since moved on while we are back to the same old wearisome arguments about whether or not the subsidy exists. Our go-go nature appears to have gotten the better of us. Majority – call it the silent ones if you like – it would appear, could no longer be bothered with either the economics or even the semantics of fuel subsidies, they have since swallowed the full pill of deregulation – this time through the back door. Scarcity or not, I know for a fact that you could purchase fuel in some stations in Lagos without as much as breaking a sweat – so long as you are willing to part with N140 for a litre in the deregulated market downtown! Seems one moment when Nigerians wouldn’t mind to cut their noses – even if temporarily – to get going!
Truly, the subject of fuel subsidy never ceases to fascinate. As in the round leather game of football, it is one subject that every Kasali, Chinedu and Usman would claim, with some air of certainty, some degree of knowledge if not expertise. You know why? Everybody is involved – from the jerry-can clutching vulcanizer to the barber next door; what about the welder or even the ubiquitous taxi driver all of whom the liquid gold has come to mean the difference between life and death?
Yes, everyone is involved.
Agreed, subsidy is a touchy subject. I have seen otherwise brilliant minds relapse into some wild, witless garbage when the subject is fuel subsidy. Many would rather be politically correct than risk ruffling feathers. And so argument persists that simply because oil is of nature’s finest gift to us, we can continue to dispense with the niceties of economics!
I have looked at the contending arguments; it seems to me that the difference between the most vociferous proponents of fuel subsidy removal and their opponents is actually more shadow than real substance! Forget what the marketers and their hordes of middlemen say; the truth is that they want the subsidy regime to continue; it is their surest route to unearned wealth. What about the bureaucrats, the men and women wielding awesome powers over our lives? It is their surest guarantee of raw, invisible power – without control. As one would imagine, the politicians want it for a different purpose; for them, it is a fascinating subject for politricking any day.
Did I hear the “ogas at the top” describe the subsidy regime as “unsustainable”? What their lucre-addicted lordships meant to say is that they could do with more of freshly-minted wads in the piggy bank to do as they please.
The irony of course is that a section of the hoi polloi actually believes the lie that the petrol and kerosene subsidy – together with its impregnable infrastructure of graft that services it – actually comes close to their share of the proverbial national cake! That for me is the most tragic part of the raging debate.
Is there really a subsidy? I have heard the question over and over again. To the question I say – we wouldn’t be who we are if we are not found debating whether or not the weekend May 14 Platts reference price of $718.49 per metric tonne (that is N105.55 per litre) is real! Note that this is not yet reflective of distribution costs as well as the marketers’ margins! With petrol price officially pegged at N87 per litre, the above should ordinarily solve the arithmetic.
Next question – why can’t the federal government build new refineries? Or its variant – why can’t the government compel the International Companies (IOCs) to build refineries in the country? Or still, get the private sector to build new refineries? Good question – all of them!
Let me proceed from the known to the unknown. Again, as if we don’t know, the reality is that OPEC’s leading crude oil exporter refines only a miniscule fraction of its domestic fuel needs. Daily requirement for petrol is said to range from 40-45 million litres daily of which the four refineries combined is said to deliver a miserable 10-15 percent. To bridge the gap, we rely on imports at deleterious costs to our foreign reserves and the larger national economy. From an ordinarily hefty subsidy bill of barely N250 billion in 2011; the nation has since the literally broken the banks – spending close to a trillion on kerosene and petrol alone annually!
So why can’t the government build new refineries? The answer: the same reason the government is unable to bring back the national carrier; it’s the same argument about government’s inability to fix the multiplicity of our roads; the reason the power sector is considered as jinxed! I daresay here that the old cliché about the government not being good at business is true only to the extent that our government lacks both the means and the discipline to run a modern enterprise! The tiny Island country of Singapore is a living exception to that rule!
As for getting the IOCs to build new refineries, it seems rather too easy to overlook the terrible effects of government’s meddlesomeness on the downstream sector. Does anyone still remember that the first refinery in the country was actually built not by government but by Shell? It seems aeons ago when the motorist in Lagos bought fuel at a different price from his compatriot in Maiduguri! That was when market ruled – long before our leaders pronounced that money was not our problem but how to spend it!
To my main point. There comes a time in the life of a nation when citizens just have to make hard choices. The current season would appear such a time. The simple truth is that the nation cannot afford, even if it wants, to sustain the current regime of price support called subsidy. Something simply has to give. Moreover, I have stated elsewhere that the subsidy regime is unfair to the extent that the burden is regressive. In short, it is time to let go! Agreed, it is not the end; it’s one sure step on the path to dismantling the infrastructure of fraud currently sapping the nation’s vital juices. That done, with supporting policies, the goal of local refining might actually be closer than many would dare to imagine. I rise!”
Need I say more?
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