FUEL is any material used to produce heat or power by combustion and that includes diesel, gas, premium motor spirit, otherwise called petrol or gasoline; fuel oil materials from atomic energy, aviation fuel and rocket fuel. In Nigerian parlance however, fuel is synonymous with petrol so this discourse will be limited to PMS. Fuel to Nigerians is petrol.
Governance is about the welfare of the vast majority of the population. It is also about the courage to take the difficult and sometimes painful but right decisions in the overall interest of the people.
Some politicians known as populist, appeal to the shallow sentiments of the public and mask or refuse to reveal economic realities. A typical example is the current debt crisis in Greece where the government wrongly assumed that bravado will wipe out legitimate debts. If you borrowed money, you can negotiate but the debt has to be repaid. It looks a lot more humiliating when a government is forced to make a U-turn and literally lick its own sputum.
Nigeria currently spends N1.69 billion daily as subsidy on petrol. Diesel is deregulated so one assumes we are paying the economic price. If this daily figure is extrapolated for a year,Nigeriawill be spending more than 15% of our yearly budget of approximately N4 trillion in subsidising one product alone. There are, of-course other products that receive subsidies from the government. The World Bank report reckons that by the end of this year Nigeria will be spending close to N2 billion daily to make petrol available at the pump of N87 per litre.
The question every Nigerian must truly answer is whether we can operate at this level of expenditure without sacrificing other sectors of our national development. Can we really go for broke with our eyes wide open? There have been many valid arguments for and against petrol subsidy so I won’t rehash them. If we do not act, reality will catch up with us.
Some of the compelling points raised by ordinary Nigerians against subsidy removal is that it is their only dividend as owners of crude oil. Is this really correct? Our major transport systems – trailers, tankers, luxury buses, transport vehicles, trains which impact directly on the economic lives of the vast majority of Nigerians are powered by diesel which is deregulated. It is the elite and the oil marketers, who drive cars that benefit from the subsidy on petrol. These groups can also afford to pay economic prices for petrol: so why are we going round in circles. Subsidy, if at all necessary, has to be for the poor.
In some states in Nigeria, Nassarawa, Zamfara, Imo, Anambra, to name just a few, petrol sells at betweenN105 – N110 per litre. The people gladly buy; there is no shortage and there are no queues. Who really is subsidising who?
The dispute between oil marketers and government about who owes what is always recurring and there is no end in sight. Malfeasance and the endemic corruption in that importation arrangement is ingrained so the only way out is to dismantle it now. It can only get worse and the petrol queues will become permanent. This is almost happening in Abuja and Lagos.
The simplest economic principle of all time of “Supply and Demand” will not change in Nigeria. If by tomorrow we fix all our four refineries in Port-Harcourt, Warri and Kaduna and possibly build new ones, petrol will flood the market and prices will crash; this is not rocket science.The entire dynamics will change when Dangote refinery comes on stream.
What the government must do is to go into town-hall meetings with organised labour, students, market women and convince them as to why the subsidy must go. There is no better time for this exercise than now when the National Assembly is in a state of flux.
Governance being a quid pro quo business must ensure that monies realised from fuel subsidy removal are channelled into building access roads, providing power and water in the rural areas. There must be village security.
The vast majority of Nigerians are proud and do not want hand-outs from anybody – not even the government. They will rather create wealth and pay taxes than stand in offices for hours waiting for LPOS. Apart from security of lives and property, the second most important duty of government in my view is to create an enabling environment so that serious minded citizens can create wealth and jobs.
There are many Nigerians who are anxious to set up cottage industries in their communities and employ people. They also want to retire to cleaner and fresher environs. Opening the rural areas is a sine-qua-non in arresting youth restiveness and tackling insurgency. We will also arrest the rural – urban migration which totally distorts the Eco-system and stresses our cities.
Price fixing by legislation, as is currently done for petrol, has never grown any economy and Nigeria will not be the miracle.
Dr. Mbadiwe, writes from Abuja