The hottest news in Nigeria is about fuel subsidy. The decision by President Goodluck Jonathan and his economic team to announce the removal of fuel subsidy as from next year (less than three months from now) has taken both supporters and opponents by surprise. And like all true Nigerians, passionate comments for and against the impending fuel price increase are pouring in from all angles. But this controversy is not new, and I doubt very much if we will have heard the last of it even after this President leaves office.
Let me take you down memory lane. At independence in 1960, fuel importation and sales were handled by private business enterprises. Government had no hand in it. I remember with distinct nostalgia the mid-sixties and early seventies in Nigeria. Filling stations competed with each other to get customers – each trying to charge slightly lower prices than the other. They also offered inducements such as free plastic and glass cups as well as ‘free air’ to motorists in order to attract them. Petrol prices varied from day to day and week to week depending on the importers and international price regimes. But the great thing was that there was no product scarcity or shortage, and no profiteering either. What went wrong?
I bought my first car in 1978 when things were this good. With less than 4 Naira I could fill up the tank of my small Japanese car. That was within my income level. Unfortunately, that was the very year when the military government led by Olusegun Obasanjo took the ill-advised step of raising and fixing fuel prices. The government doubled the price of petrol to 15kobo per litre, triggering a series of price increases and subsidy debates which is yet to end 33 years after. Under the military, the litre price of petrol grew in quantum leaps to 60kobo in 1990, 70kobo in 1992, N3.25k and N11.00k in 1993. The price still went on rising, going up to N20.00k per litre in 1998 and N22.00k in 2000. Obasanjo in his re-incarnation as an elected civilian President continued his tinkering with fuel price increases, raising the price of petrol to N40.00k per litre in 2003, and finally to N65.00k where it now stands. I stand to be corrected if I am wrong, but I sincerely believe that Obasanjo was almost single-handedly responsible for all the fuel price increases we have suffered as a nation since independence.
Under Obasanjo’s watch, government actively meddled in and took over nearly all aspects of mining and exportation, refining, importation and sale of petroleum products in Nigeria. The few private companies left in the sector have had to dance to the music of corruption and gross inefficiency being played by military as well as civilian government appointees and stooges. While a few Nigerians have smiled (and are still smiling) all the way to foreign banks with their oil loot, the majority of Nigerians have continued to groan under the weight of an enforced fuel price regime caused by the mismanagement and sabotage of our domestic oil refineries as well as the gross inefficiency and massive corruption beguiling our fuel importation and distributive system. The subsidy which government talks about is actually the subsidy the nation is paying to corruption and ineptitude.
When people rise up against the so-called removal of fuel subsidy, two things come to mind.
In the first place, for us ordinary Nigerians, it means that Government is once again going to raise fuel prices (in the name of subsidy removal) in order to stock its treasury with more funds to be shared between the three tiers of government. Of course we are used to the deceptive promises that the product would be made more available, and that the extra money generated would be used to improve our national infrastructure and the lot of the poor. As long as corruption in the lucrative oil sector of the economy is allowed to continue, more subsidies will creep into the pockets of corrupt politicians and key oil sector managers. Eventually, more price increases will become necessary, and the vicious spiral will continue. In the not too distant future, it may be more costly to fill up your tank with petrol than to buy a secondhand car. This is a gloomy prospect for Nigerians.
In the second place, petroleum products constitute the prime power source that drives the whole economy and our social life as a nation. Everything depends on the price of fuel. As fuel prices are set to go up with the announcement of this latest attempt at subsidy removal, we all know that the prices of commodities, food and everything else in Nigeria will go up astronomically. Economists call it inflation. For the rest of us, we know that it is more than inflation. It means more sweat, hunger, illness and death for ordinary Nigerians. Why is this government willing to inflict this pain and suffering on the very people who elected it to office barely seven months after?
My candid view on this matter is this. If the President truly believes that he wants to do away with the much-talked about fuel subsidy, then he must be prepared to go all the way. There are two things he must do to ensure success, and perhaps take us back to the golden post-independence era.
Firstly, he should not be talking about fuel subsidy removal at all. What President Jonathan should be aiming for is complete deregulation of the oil sector. Neither NNPC nor any government agency should be involved in refining, importation or sale of petroleum products anywhere in Nigeria. Everything should be left to market-driven forces – it is ridiculous to say government is removing fuel subsidy, and then go ahead and fix a price for petroleum products. There is no sense in it. Let private companies be allowed to import the products, or refine them locally, and sell at their own prices. Any attempt by government to implement a phased withdrawal of subsidy or fix ceiling prices for the products will be manipulated by those who have been stealing from the system, and it will fail. I know many Nigerians will groan at this suggestion – but I sincerely believe that what happened with the telecommunication sector with the introduction of independent GSM companies will also happen in the petroleum sector. Prices will be high initially, but eventually, market forces will bring them down. Remember that some of us initially paid as much as N25,000 for our GSM SIM-cards. They now go for as low as N200. We had to beg, crawl and bribe to get SIM cards at the beginning, now they are available in every corner shop in the country. Telephones were the preserve of the super-rich in those days. Remember David Mark’s arrogant statement when he was Minister for Telecommunications before deregulation: ‘Telephones are not for the poor!’ With deregulation, every Nigerian can now enjoy telephone services. That is the benefit of government deregulation. My honest view is that the petroleum sector will also gain if the deregulation is total, with no half-way measures.
Secondly, President Jonathan must institute a very high powered and high profile judicial inquiry into all the theft and corruption that has bedeviled Nigeria’s oil sector. Culprits must be exposed and punished, no matter how highly placed. This is the only way Nigerians can forgive him when they start paying the high prices for petroleum products that will emerge after he introduces deregulation. If he does not have the guts to do this, let him please let sleeping dogs lie – his predecessor President Yar’Adua was wise enough to refuse to increase fuel prices while he was alive. Jonathan has a lot to learn from him.
No comments:
Post a Comment