Fury of the patient man
In spite of the official pronouncement that the removal of subsidy on petrol has been suspended, the government of President Muhammadu Buhari has already presented us with a fait accompli. By June this year, the government will, at the behest of the World Bank/International Monetary Fund (IMF) remove subsidy on Premium Motor Spirit (PMS) also known as petrol. And by then the price is expected to increase exponentially from the existing N162-165 per liter to N403 per liter.
As a prelude to this impending withdrawal of petrol subsidy, the government has enacted the Petroleum Industry Act (PIA). To reinforce the PIA, provision for payment of subsidy on petroleum, based on the 2022 budget, will peter out in June this year. In addition, the Nigeria National Petroleum Corporation (NNPC) has been transformed into a limited liability company and it is envisioned that its affairs will be ran purely on the principles of business.
As if these were not enough, the government has argued among others that: 1) Nigerians, henceforth, have to defer to international market forces as they relate to crude oil price and exchange rate; 2) revenues accruing to government are largely spent on recurrent expenditure (salaries and allowances) to the detriment of capital expenditure (investment in projects and infrastructure); 3) that as of January 14, 2022, the PMS pricing template was N403, making a subsidy differential of N241 per liter as follows: petrol per liter from the country of import is N349 while local distribution/logistics push the total cost ultimately to N403; 4) PMS sells higher in other countries; 5) that the nearly N2 trillion subsidy which the government pays annually on subsidy could have been invested in other areas such as infrastructure.
Before I address the above arguments ad seriatim, let me acknowledge that the removal of subsidy on petrol has been a perennial pre-occupation with our governments over a period spanning more than three decades. At a point the late indefatigable Chief Gani Fawehinmi chronicled these removals with nearly the same fervor and frequency with which he produced his flagship Weekly Law Report.
Second, the removal of these subsidies became so frequent and the arguments informing them became so grating and tedious that Nigerians, out of irritation, clamoured for the prompt identification of this unending subsidy and its removal so that they could have some respite. Third, in the aftermath of the removal of each set of subsidies, the living condition of Nigerians tended to worsen rather than to improve. Fourth, the infrastructure and legacy projects which various governments pledged ended up, at best as ruses and mirages.
There is no doubt that we operate within the orbit of an international capitalist system. And with the advent of globalization, what happens in one part of the world affects the other, for good or for ill. But even America, the avatar of capitalism and the foremost champion of market forces is always quick to modulate these forces when they buffet or adversely affect its citizens. America deliberately subsidizes agriculture. And shortly before the last Christmas season when the price of petrol went up in that country, President Joe Biden quickly glutted the market from the country’s reserves thereby bringing down the price and ameliorating the suffering of his people. As at now the Biden administration is valiantly taming inflation at 7 per cent, said to be the highest since 1982. As I write, our inflation put at a record 14.50 per cent, is yet to call the attention of the Buhari administration!
It is true that government expends a lot on salaries and allowances of Ministries, Departments and Agencies (MDAs). But one can best imagine how it would have been for the health and peace of this country if it were otherwise. Ours is an inchoate capitalism in which the private companies hardly employ as many workers as their counterparts in the West where multinationals employ in millions. Besides, basic infrastructure such as roads, rails, electricity and a speedy Internet have not been put in place to facilitate industrialization. Neither has the environment been created to spur and fire the enterprise and ingenuity of our youths.
It may be difficult to fault the figures the government is bandying regarding the amounts it spends to purchase and distribute refined oil from abroad. But is it not a shame that Nigeria has to refine its crude abroad and then freight its refined products back home thereby passig off these avoidable costs to its impoverished citizens? Is it not a shame that of all members of the Organization of Petroleum Exporting Countries (OPEC), Nigeria is the only one that refines its crude abroad? Is it not a shame that none of Nigeria’s refineries is in such a good shape as to refine crude, even if for local consumption? Is it not a shame that the country, which is presided by a former Petroleum Minister, and who has been Petroleum Minister since 2015, has been unable to successfully do a Turn Around Maintenance (TAM) of any of our refineries? Is it not a greater shame that Aliko Dangote who started building a refinery estimated at $12 billion in 2016 will, in September this year, commence producing nearly 650,000 barrels per day and which is expected to save Nigeria $7 billion in foreign exchange annually while none of Nigeria’s refineries is up and running?
The government’s argument that petrol is sold at higher prices in other countries is at best languid, if not ludicrous. It fails to provide the standard of living in those countries compared with Nigeria adjudged as the poverty capital of the world with 93.9 percent of the population living below the poverty line as at September 2021.
The point is that until the government dismantles the cartel or lobby that profits hugely from our slovenly way of administering the petroleum sector by deliberately rendering our refineries comatose in order to import refined products which are then sold to helpless Nigerians at exorbitant prices, the case for the removal of subsidy will not resonate with Nigerians. Worse is that each time the subsidy is removed, rather than see a remarkable improvement in infrastructure and other services, we only witness a more rapid pauperization of Nigerians.
What is most painful is that anytime subsidy on petrol is removed, it increases the misery of Nigerians. This is because other costs of living associated with transportation go through the roof.
Compounding the massive poverty bestriding the land, like a colossus, is the menace of insecurity. On a daily basis, the media are awash with tales of woe and gory killings by insurgents, bandits and kidnappers. The people are hurting and the country is literally in mourning. Is it against this funereal background that the government intends to remove subsidy on petrol thereby increasing the sadness of Nigerians? Surely, General Abdulsalami Abubakar is not a rabble rouser or a starry-eyed revolutionary.
But when he warns of adverse reactions that are likely to follow an impending removal of subsidy on petrol, the government, long noted for insensitivity and imperviousness, will do well to listen. Even Dr. Hakeem Baba Ahmed, that this government’s minions are always quick to cast in the mould of turncoat and loser, has wondered aloud how you could increase the price of petrol at the eve of a general election.
I have said it elsewhere that Nigerians are an appreciative and forgiving people. They thank you when you do a good deed. And they overlook your shortcomings when you show genuine contrition or offer an apology. They are also patient and full of forbearance. Our leaders, it seems to me, like to take this patience and long suffering for granted. But like the Chinese say, “Beware the fury of a patient man.”
Dazang is the immediate past Director of Media and Public Enlightenment of INEC.