Removal of fuel subsidy again
On Tuesday September 20, 2011 the Central Bank Governor Sanusi Lamido Sanusi was quoted by the Daily Trust as insisting on the deregulation of fuel prices, arguing that the country ‘’was feeding refineries abroad to the detriment of the ones at home by paying subsidies on imported refined petroleum products’’. He noted that ‘’we are […]
On Tuesday September 20, 2011 the Central Bank Governor Sanusi Lamido Sanusi was quoted by the Daily Trust as insisting on the deregulation of fuel prices, arguing that the country ‘’was feeding refineries abroad to the detriment of the ones at home by paying subsidies on imported refined petroleum products’’. He noted that ‘’we are keeping refineries abroad open and shutting our own’’ adding that the ministry of finance has supported deregulation but there would be a safety net, he told reporters at the end of the CBN monetary policy committee meeting in Abuja.
Now, from the foregoing one can safely deduce that this time around government is seeking to remove the subsidies so that it can use the proceeds to repair and revitalize the refineries, many of which have been in disuse as the CBN governor noted. There is a ring of speciousness akin to fishing for any reason at all in order to justify the impending subsidy removal. Many months ago, a huge sum of money was earmarked for the resuscitation of the refineries—all in an attempt at putting a stop to petroleum importation. If as we are now being told, after so much has been spent on their repairs and they are still not working, shouldn’t those charged with the assignment be made to account for the continuing disrepair of the refineries? Should Nigerians be made to provide for another fund, when earlier one provided has not been put to good use by those charged with repairing the refineries?
In any case, even when the refineries were all working, that fact did not stop the government(s) at that time to still make removal of subsidies a major plank of their policy on revenue. It was the time when all sorts of ridiculous reasons were given why the subsidies should go, including the fact that Nigerians bought a litre of petrol too cheaply because it was less than a bottle of coke! But one doesn’t have to be an economist to know that as soon as the issue of subsidies is raised an automatic inflationary effect is let loose— on transportation, consumer goods, school fees, health bills and everything else. The effect is that already hard up; the general public is still further put under unnecessary economic pressures whose general impact is to pauperize them, driving many to desperation—namely official misdemeanors including grand larceny, looting, armed robbery, kidnapping and ransom extortion etc.
And as they say the wheel comes full circle, with the government wittingly spawning every anti –social attitude on display, by its counter- productive policy on fuel subsidies. The recurring argument successive governments have given for removal of subsidies has always been that they need funds to implement both capital and recurrent projects. For instance, under recurrent expenditure, road repair has always taken a huge chunk of budgeted funds; they become bad with potholes as soon as they are repaired, which put a lot of strain on government ability to procure the funds it needs for the repairs.
Still it bears repeating that government should look for a less traumatic ways to procure the funds needed for development efforts. For one, it can cut the wastes that suffuse government business. The cost of running government at its various tiers is too high; a fact that has been well documented, therefore conscious effort should be made to draw it down drastically. Governor Ibikunle Amosu, the Ogun state governor has commenced slashing salaries of political appointees and as he put it while addressing teachers during World Teachers’ Day celebration at Abeokuta; he needed the money to embark on infrastructural development.
Surely, a reduction of salaries and allowances for political office holders and national assembly members and their state counterparts to reflect current realities of parsimony in government would do everyone some good. This should go side by side with blocking all avenues of leakages characterized by instances where people simply help themselves to unearned funds. If approached with determination it will release the much needed funds for development. All this is suggesting that government should step back from attempt at subsidy withdrawal and the concomitant increase in fuel price and give peace a chance.
A wildcat labour unrest on account of social and economic conditions that would ensue in the wake of this ill- advised measure would not augur well for the already unhealthy security situation that is prevailing; it will give a field day to agent provocateurs to exploit and further create unnecessary social chaos and instability. Removal of the nebulous subsidy has become a soft option for every government—a ready source of fund they always conjure up, thereby becoming an easy way of getting money. But it is nonetheless a callous way of running a country because it subjects the people to untold hardship. Government for once, should therefore show a little respect for the people and demonstrate creativity and imagination by casting its net elsewhere for the funds it needs.