Fuel scarcity: Time to remove subsidy  (II)

Continued from Monday, May 18, 2015
THE outgoing government, at its inception, was confronted by the questionable oil subsidy and its attendant rip-off. The powerful oil cabal, meanwhile, is always on hand to welcome any new government.

The members spell out what they want from any incoming administration and warn against any attempt to remove the ‘milk bottle’ from their mouths, threatening to mobilise the people against the government if the status quo is reversed. A cheap blackmail! But that is what has been happening.

President Jonathan in 2012 was faced with sores inflicted on the nation by the NNPC and the subsidy issue. Attempt to confront the cabal was met with stiff resistance. Leaders of labour and protest groups – ‘Occupy Lagos’ and ‘Occupy Abuja’ – went to the rooftops to demonstrate their disapproval.
One can only wonder whether labour unions have no other platforms to fight the cause of workers but stage sit-ins against the removal of fuel subsidy. While we were growing up, we often saw the Nigeria Labour Mass Transit buses.

Are they still in existence? Why was labour that fought the fuel subsidy unable to conduct itself decently in an election?
Does labour have autonomous enterprises to support suffering Nigerian workers? One would have expected that with the enormous resources at the disposal of labour, it would serve as an example to others by conducting a free, fair and uninfluenced election. But the manner it has conducted itself is unfortunate.

Unfortunately, the government lacked power to hold its ground and it gave in.
Less than two years after the protests, the nation began to hear of a missing $20 billion from supposed oil revenues. What looked like an explanation by the NNPC was that part of the money was spent on kerosene subsidy. Kerosene subsidy! May be, I didn’t hear the NNPC clearly. If the nation sincerely takes stock, can it point to any tangible gain from the subsidy? Perhaps there are a few overlooked, like private jets everywhere and new a billionaire list.

When oil rose to $140 in 2013, the boss of the International Monetary Fund (IMF) advised Nigeria to save for the rainy days. Less than a year after the oil price crashed, there were speculations that the country is broke. And when the Coordinating Minister of the Economy/Minister of Finance, Dr. Ngozi Okonjo-Iweala, recently revealed that the country had borrowed money to meet its recurrent expenditures, it became clear the issue was far more credible than thought. If a company borrows money to pay the salaries of its staff, such company is bankrupt. So, Nigeria, following Okonjo-Iweala’s position, is technically bankrupt.

Nigerians have, once again, been thrown into a fuel crisis in a country that boasts of 40,000 filling stations and more than 200 tank farms. We were told that the NNPC had over 1.2 billion litres of fuel in storage, last week. I ask: where is the fuel? If, in the face of long queues at stations, official record says there is no shortage, we really need to ask: where is the fuel?

Apapa Road has been locked down in the past three weeks because of the impunity of tanker drivers. The menace is worsened by the nation’s reliance on private depots. This is because the NNPC has no fuel in virtually all its depots nationwide. It now relies on private depots in Apapa to distribute products to marketers – another effect of tight regulation of the downstream sector as against liberalizing it. Had the industry been liberalized, such situation would not have happened, in the first instance. Corruption breeds all manners of irregularities and failings. It has paralysed the NNPC and overwhelmed our financial umpire. The Nigerian Navy is now, unfortunately, a de facto oil trader and regulator.

The President-elect must summon enough courage to remove the subsidy and fix the perennial challenges facing the sector, if he truly wants to make meaningful impact on the economy and assist the common man. Time has proved that the subsidy does not hold succour for the downtrodden. The government also needs to pay attention to efficient regulation of the downstream sector.  About 3,000 well-operated filling stations will serve the country more efficiently than 40,000 build to collect subsidized fuel, feasting on government allocations.

The time has come to finally take the bull by the horns. The NNPC cannot continue to suck the country dry. It should be made to run as a profit-oriented institution, like every other enterprise in the country. They all must be made to pay taxes, which should be deducted before they are allowed to import or refine fuel. Most importantly, we need an NNPC that can do the job of a regulator. The failure of the NNPC manifests in the undue advantages the traders are getting. This must stop.

Let the sector be liberalized and opened up, so that investors can build refineries. I can assure you that just as we see tank farms everywhere, today, even so would refineries spring up, if the sector is opened, thereby creating more employments. This is the way to go in plugging the hole in the refining industry. I know some critics would say, ‘build refineries first’. No. Let government attempt liberalization of the market even for a year. If there is no marked difference, then let the policy be reversed.

You may wish to know the trick employed by international oil cartels who key in to the fraud in Nigeria’s subsidized market: When oil prices fall, this cartel would flood Nigeria’s market with products. But as soon as prices rise, products meant for Nigeria are diverted to regions where the forces of demand and supply determine price. Only a deregulated market can checkmate these excesses.

I will end this article with a line by George Orwell: “In time of ‘national’ deceit, telling the truth is a revolutionary act.”

•Ankabeli wrote from Okpella, Etsako East Council of Edo State
•CONCLUDED