Before fuel subsidy is terminated

by Gbenga Kayode

Perhaps, aside from the harrowing experience of the unfortunate 30-month Civil War that raged between 1967 and 1970, which virtually tore apart the nation’s social fabric still dangerously holding the people together till this day, the parlous, testy state of affairs in Nigeria’s socio-economic and political systems in recent times definitely calls for an urgent remedy.

This becomes necessary before things probably go awry once more in this clime, particularly in connection with the proposed removal of the contentious fuel subsidy with the attendant deregulation of the downstream petroleum sector and its far-reaching implications on the economic survival and quality of life of the average Nigerian years after the subsidy discontinuation, tentatively slated for April 2012.

With escalating insecurity of lives and property across the land, ranging from armed robbery attacks on banks, institutions and individuals, youth unemployment resulting in pervasive crime-oriented misdemeanours, social discontent and tensions to unprovoked, vicious assault on Nigerians and their guests by Boko Haram Islamic fundamentalists, who determinedly and gleefully blast people, religious and security institutions and property into smithereens, many informed minds and keen observers of the disconcerting goings-on have acknowledged and submitted that days of calamity are truly here in the country.

As the supposed sixth largest crude oil exporter in the world, the country debatably, cannot boast of any well-functioning refineries, but purportedly has few of its citizenry owning private and flourishing refineries located outside the nation’s shores.

Being a nation in the firm grip of cabals and deeply sunk in a combination of anti-development factors as political patronage, rent-seeking, greed and outright corruption largely permitted by the leadership, and godfatherism of varied hues and self-interests from political and Civil Service appointments, seaports operations, fertilizer, fake drugs, rice to generators importation among others, Nigerians are now confronted with the shocking revelation that the country “spent N600 billion to subsidise the prices of petroleum products in 2010 and N1.3 trillion this year for the same purpose, representing one third of the annual Federal budget.”

But then, whose fault is this if not that of outright leadership negligence or failure? That is why the current Administration needs to honestly answer such questions as: Who issued the supplementary licences to more people and firms to join the oil importation bazaar lately? Didn’t the Government count the cost before going all out to give fuel importation “jobs for the boys” to come and partake of the national largesse? Why is the Federal Government crying out loud to the whole now that the alleged subsidy is eating deep into the fiscal budget meant for the good of the majority of Nigerians?

Considered a foregone conclusion by the powers that be though, the Government yet continues to dialogue with cross-sections of the Nigerian populace and presents its Subsidy Reinvestment and Empowerment Programme (SURE) proposal, outlining how it will finance infrastructural projects and design certain social safety net programmes to cushion the effects of the subsidy removal on the populace.

However, how sure is this SURE being dangled by the Government? Many have cynically asked. No wonder there is a deluge of cynicisms from a broad spectrum of Nigerians as the Government tries to convince them before yanking the subsidy. Such scepticisms, of course, are not unexpected from them, given that the masses of the Nigerian people have been pauperised, kept down, and intolerably been disappointed by their leaders for decades.

While buttressing her point on the for all to see reason and support the planned subsidy removal, Dr. Ngozi Okonjo-Iweala, Minister for Finance and Coordinating Minister for the Economy, at the 2nd Edition of Town Hall meeting of the Newspapers Proprietors’ Association of Nigeria (NPAN) organised to sensitise Nigerians on the imminent subsidy removal in Lagos lately, had disclosed that the landing cost of refined fuel per litre is N123; cost of distribution N15.72, totalling N139 per litre.

By implication, hard times may be here for the fact that with the current official of N65 per litre and invariably over 200 percent increment in price, the people may not purchase the product less than N140 per litre for petrol, otherwise known as Premium Motor Spirit (PMS), when the subsidy payment is finally stopped.

Okonjo-Iweala, along with her Petroleum Ministry counterpart, Mrs. Deizani Allison-Madueke, Central Bank of Nigeria Governor, Malam Sanusi Lamido Sanusi, and other top Government officials further encouraged Nigerians to bear the temporary hardships/pains and make more sacrifices for the survival of the nation’s economy. Perhaps, a typical case of beating someone when he or she is already down?

Nonetheless, in real terms, who actually bears the brunt in form of the impending hardships/pains resulting from apparent leadership failure in this regard? Is it the “powerful” oil cabal, who with the alleged active connivance of some Government functionaries, particularly in the Nigerian National Petroleum Corporation (NNPC), have ripped the nation off its sizeable oil earnings, or the top Government officials whom taxpayers finance their daily needs and activities, while buying virtually nothing with their reasonably vast salaries and allowances?

Just as the Finance Minister, at the NPAN forum, singly and candidly acknowledged the fact that the biggest problems the current Administration faces are those of official corruption and lack of trust in Government by the disenchanted Nigerians, whose fortunes have been disappointingly short-changed repeatedly by successive administrations, the Government surely needs to take the people into confidence, embark on more aggressive mass sensitisation programmes, block oil revenue leakages, clearly outline the expected gains of the subsidy removal, while re-assuring Nigerians that the measure will not aggravate their already hanging socio-economic situation if it finally terminates the subsidy.

Despite that Mohandas (Mahatma) K. Gandhi, late Indian leader widely adjudged the greatest figure of the 20th Century, enjoined humans everywhere, that “you must not lose faith in humanity….”, nevertheless, because of perpetual disconnect between the leadership and their following for a comparatively long time, scores of Nigerians, at present, are fast losing faith and hope of the leadership’s ability to restore the nation’s entire socio-economic and political systems.

In order to regain the trust of the governed, majority of who pine in abject poverty across the land, even in the midst of abundant human capital and mineral deposits, the Government must walk its talk by convincing the populace that fuel subsidy removal is justifiable. Again, Gandhi admonished leaders thus: “If your actions aren’t in alignment with what you’re communicating, then you start to hurt your own belief in what you can do. And other people’s belief in you, too…. You must be the change you wish to see in the world.”

Contrary to some cheery suggestions in certain quarters that the Federal Government should just go ahead and discontinue fuel subsidy as it so desires, deregulate the downstream petroleum sector and damn the consequence, one rather advises that the Government, while taking steps to rehabilitate the ailing refineries and diversifying the economy, should intensify more efforts at sensitising a very broad spectrum of interest groups down to the grassroots with its SURE proposal and hypothetical planned safety net programmes towards alleviating the possible agonising consequences of subsidy removal.
< br/>As former President Olusegun Obasanjo, early December 2011, tacitly warned President Jonathan Administration against imposing any unpopular economic measure on Nigerians, as an ‘Arab Spring’ experience may occur in the country soon, it will be wise if the Government does its homework well enough, restore diminishing hope by empowering the people to keep living, and allow them to agree to the proposal through a sound argument.

It should be noted that civil uprisings in any form are certainly ill-wind that blows no one any good: they may consume all in the process if things suddenly snap! The Government must not walk a somewhat unfamiliar and potentially uncertain mine carelessly, but must look before it leaps in respect of the proposed fuel subsidy removal.

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1 comment

Umanu uyo joy January 3, 2012 - 7:30 am

very rich n enlightening write up.welldone…inasmuch as the idea of subsidy removal is a good one,the timing is not right…..i hope corruption allows d masses reap tge benefits of subsidy removal.


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