Controversy over removal of Nigerian fuel subsidy
LAGOS, Nigeria, Jan. 19 -- Eight days after the withdrawal of a fuel subsidy by the Federal Government of Nigeria, as announced by the Petroleum Products Pricing Regulatory Agency (PPPRA), mixed reactions have continued to trail the surprising news. Civil and Rights’ Groups, many aggrieved individuals taking to streets, and the joint Nigerian Labour Congress/ Trade Union Congress (NLC/TUC) spitting venom, the question remains, is fuel subsidy removal a blessing or curse to the country?
To antagonists, the removal is ill-timed and an act of insensitivity on the part of the Federal Government toward the plight of the common man. To them, taking to the streets, industrial shutdown of the nation's economy remains the last resort to trigger government's reversal of what they termed an act of “callousness and insensitivity”, intended by govt. to “cause anarchy” in the country.
They argued that with the withdrawal, house rent, food, transportation fare, automobile spare parts, even 'pure water' and a host of other basic necessities of life had doubled and even tripled in price.
Government authorities have said that these pains are what this present generation must suffer for the generations coming after to enjoy.
According to the government and proponents, subsidy removal and a full deregulation of the downstream sector of the oil industry remain one of the cogent steps towards repositioning the country to meet standards set by international communities.
Before the January 1, 2012 announced withdrawal, Petroleum marketers nationwide sold Premium Motor Spirit (PMS) at N65/Litre, which the government said it subsidized at N75/Litre.
With the current development, Petrol pump price will now sell for N140/Litre as announced and signed by Reginald Stanley, Executive Secretary, PPPRA. Consumers were assured of adequate supply of quality products at prices that are non-exploitative.
Despite this assurance, most Petroleum marketers in the country have been reported to have been selling at exploitative prices, ranging between N150 and N200 per litre.The effect of this cannot be undermined as consumers of the product are now at their mercy.
The Department of Petroleum Resources (DPR) said the subsidy removal lacked proper coordination, which marketers used to their advantage.
However, the Nigerian oil and gas industry operator, DPR, had in the wake of the price hike, promised Nigerians that it is working in tandem with its PPPRA and NNPC counterparts to ensure filling stations across the Federation selling above the N141/Litre benchmark price are sealed-off. Following this warning, reports have shown that most marketers have returned to the N141/Litre benchmark price, with NNPC Mega Stations selling at N138/Litre.
It is my view that fuel subsidy removal remains a blessing in disguise for our nation, especially in the long run. This, the President Jonathan's administration has assured will take about two years to be achieved.
I concur with government’s stance that removal will help reposition the oil sector which will in turn benefit Nigeria as a nation in the not too distant future.
If vividly recalled, the Telecommunication sector in 2001 was also deregulated. Then not too many Nigerians believe they could be users of mobile telephones, as prices and lines were considered exorbitant and outrageous.
Today, a mobile phone now sells for as low as N1500 and a service provider was once reported to have sold for N50, courtesy of deregulation. This development in the Telecommunication sector has no doubt brought rapid development in Nigeria's communication industry. The fact speaks for itself, even though some observers say Nigerian's pay higher in terms of communication tariff, when compared with other nations in the globe.
However, I believe that fuel subsidy removal is a blessing in disguise for this nation, if and only if there is strong political will among our leaders (the present administration) towards a sustainable developmental goals.
Necessary facilities like revamping our existing refineries, building new ones, engaging trustworthy and independent foreign investors to manage the down stream sector of our oil industry, thus, cushioning the adverse effects of removal on the poor masses in no distant time.
I further support the candid opinion of Ben Murray-Bruce, Chairman of Silverbird Television. Bruce has argued that Nigeria’s Federal Government should use savings from removing the fuel subsidy regime to invest in transport.
Speaking at a town hall meeting in Lagos, Murray-Bruce said that $2bn should be invested in the sector over the next five years as a condition of deregulating the downstream sector.
At the meeting, organized by the Newspaper Proprietors’ Association of Nigeria, Murray-Bruce also said that money saved from subsidizing fuel should be used to buy energy-efficient buses and taxis. “The Standards Organization of Nigeria should make it a policy that only vehicles that are energy-efficient can come into Nigeria. We also ask that energy-efficient vehicles should be brought into Nigeria duty-free, so that the average person can buy these vehicles,” he added.
“The government must give us hope by providing a $500 million intervention fund for the transport sector. We want another $500 million to subsidize those going by bus,” said Murray Bruce. “We want another $500 million for infrastructure, such as bus stops. Then, finally, we want another $500 million for the trucks, instead of these broken down trucks that destroy all our roads, making it impossible for us to get to places we want to be.
“In all, we want $2 billion every year for the next five years. Now, we make a deal; if you want to remove subsidy, go ahead and remove it but this is what you must do. You must subsidize the transport sector 100 per cent,” he said.
In addendum, the government should send massive mass transits to various States of the Federation to commute stranded Nigerians to their different port of calls at little or no cost. If this is not done, many Nigerians working at both public and private sectors of the economy will lose their jobs, owing to their being stranded in places that are not their working/business destinations.
Institutional and legal frameworks should also back the working operations of these mass transits, if not the would-be operators may use them at their advantage, spelling disaster for most people.
Furthermore, the fire-brigade approach taken by members of Nigeria's National Assembly on this issue should be taken for granted by all. These set of Senators and Honourables are only interested in themselves. If they truly have the interest of the masses at heart, then, they must also cut their 'jumbo' pay and allowances.
Sometime ago, Prof. Itse Sagay (SAN) lamented the jumbo pay earned by our Senators when he said a Nigerian Senator earns over $109 Million per year as against the about $400, 000 earned by US. President Barack Obama a year. If this statement is true, our Honourable members of the National Assembly should toe this line.
As for the committee set-up by govt. to further consult with Labour unions and other stakeholders in the country, with a view to resolving issues that may arise from the removal of the subsidy on petrol, to be headed by a Former Chief Justice of Nigeria, including the Subsidy Re-investment Committee, to be headed by a former High Commissioner to the United Kingdom, with a view to “oversee and ensure the effective and timely implementation of projects to be funded with the savings” the government will realize from the removal, I say they are okay.
However, Government should ensure the Subsidy Re-investment Empowerment Programme Board is backed by institutional and legal frameworks to guide and control their excesses if at last the subsidy is removed.
Finally, our former Military Heads of State, who condemn the subsidy removal without any suggested panacea on the way forward should go home to roost. After all, they placed us in the economic and sociopolitical footing that we are currently bemoaning. Perhaps, are they looking for a medium to gain cheap political popularity?