The fuel subsidy
tiff
By Muyiwa Akintunde
Three hundred and forty Naira – yes, N340 –
for a litre of Premium Motor
Spirits (PMS) by the year 2022!
Unlike other
milestones such as the esoteric Vision 20:2020 by which Nigeria was to have
been catapulted into the league of the first 20 economies in the world at the
finishing line of the last century, the N340-per-litre of what we generally
call “fuel” or “petrol” is not a joke.
Right-pricing
fuel (the euphemism for subsidy removal on petrol) has been on the card as
far back as the Second Republic (1979 – 83). The government of President Shehu
Shagari jacked up the PMS pump price from 15.3 kobo to 20 kobo in 1982. That
was when 55 kobo would buy one US dollar! Shagari didn’t make it a headline,
but his administration bore subsidy on petrol.
The term “subsidy” in relation of fuel became
an official Nigerian lexicon four years later when military President Ibrahim
Babangida introduced the widely unpopular Structural Adjustment Programme,
influenced by the International Monetary Fund. So, the pump price moved from 20
kobo to 39 kobo per litre.
Fuel subsidy removal has since developed into
the banana peel of many administrations since then. For instance, those who
wanted President Goodluck Jonathan out of power massed against his commitment
to kick subsidy in the petroleum sector out of our life. On the first day of
2012, Jonathan gave Nigerians an unusual New Year gift in the form of the cancellation
of fuel subsidy. Civil society and opposition politicians rallied protesters in
major cities against the policy. “Occupy Nigeria”, as the movement was known,
was a major factor in making the statesman from Otuoke un-electable and unable
to repeat the class as President of the Federal Republic of Nigeria. He lost and
uncharacteristically conceded the 2015 poll. But from N87 per litre where
Jonathan left it, the pump price has skyrocketed to N165 today.
From the point
that Nigeria’s oil corporation, the Nigerian National Petroleum Corporation was
dressed in a corporate garb two months ago following the enactment of the
Petroleum Industry Act, it was obvious that the subsidy regime and allied
issues would no longer be treated as “business as usual”. Tuesday’s
announcement by the Group Managing Director of the new NNPC Limited, Mele Kyari
was therefore anticipated. For quite a number of people, the shock was not the
increase but that the pump price of fuel would hit the root by as much as 110
per cent early next year!
In a country
where the akara seller next door
blames her price increase on the existing pump price of fuel even when none of
the components of her business justified her claim, tougher times indeed lie
ahead. Nigerians are no doubt resilient – aren’t we the happiest people on the
face of the earth? – but this is one big hit that may be too hard to bear.
How well have
we recovered from the economic setback propelled by the Covid-19 pandemic to be
able to navigate the unpleasant economic time the spiralling inflation expected
post-subsidy removal will usher in? This is one of the major reasons that
organised labour is leading the campaign against the proposed hike.
Government says
it will provide a soft landing for the vulnerable through financial support.
Finance, Budget and National Planning Minister Zainab Ahmed has been on the
rooftop lately, shouting about the N5,000 support for 40 million poor Nigerians.
We have never
been faithful with figures. Our last attempt at counting ourselves was 20 years
ago! As a result, we have been basing our projections on guesstimation (guess work and estimation). How do we then get the precise
data on who gets what? How do we eliminate potential fraud in the system, in which
previous policies were enmeshed in? How will the palliative not end up in the
wrong hands as experienced in similar initiatives?
Throwing cash
into this challenge is not smart. An oil-producing country that depends on
other countries to refine its raw product and import it in finished form back
to it has prepared itself to sink into the deep shit we now find ourselves. For
decades that Nigeria embarked on turn-around maintenance of our refineries, the
only things that turned around were the pockets of those in charge with their
pockets bulging at the seams. One of the hopes in the horizon is the 650,000
barrels a day by Dangote Refinery. But that massive relief remained only what
it is: hope.
Yes, Nigeria is
bleeding from the subsidy on fuel, but have we done enough to check leakages in
the system through which the country pays for product not supplied? Have we killed the corruption within the
supply chain? Of course, if we don’t kill corruption, the cankerworm will hit
back at us ferociously, and kill us. That is the dilemma of the Nigerian
situation.
Caveat
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a weekly column, seeks to promote healthy discussion on germane public issues. Readers
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This writer is
not all-knowing. Please feel free to disagree with views expressed here.
In doing so,
however, make your comments free of bile: no abuse, no disrespect to others’
comments. And, please be factual.
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Next week: ENDSARS, the youth and the rest of us
