The wages of subsidy removal
The battle- line is clearly drawn between the people who consider themselves as being at the receiving end and the State, along with its hegemonic agencies. Labour, civil society, the critical mass, the press and others, including the private sector, have been roundly unequivocal about their stiff opposition to the proposed removal of subsidy by […]
The battle- line is clearly drawn between the people who consider themselves as being at the receiving end and the State, along with its hegemonic agencies. Labour, civil society, the critical mass, the press and others, including the private sector, have been roundly unequivocal about their stiff opposition to the proposed removal of subsidy by government—this, in spite of the cushioning that government promises to provide to lessen the burden of such a policy. The massive opposition build their argument on a number of platforms; that the subsidy is imaginary at worst, secretive at best, beneficial only to a clique and never to the masses who have carried the crippling yoke of outrageous pump prices of all petroleum products, since the last series of prize hikes; that the removal of subsidy does not guarantee improvement in the socio-economic conditions of the electorate, regardless of government’s promise to turn over sums accruing from removed subsidy to infrastructural work.
Labour and the critical mass of society are persuaded that from experience, nothing good can come to them as benefit from deregulation, via subsidy withdrawal. They buffet their argument with the fact that colossal sums have been allocated in the past to power and roads, yet the nation wakes and sleeps in darkness. Our roads are pools of water in ditches called pot-holes. Our streets have hardly been darker, billions of dollars after. Huge sums accrue from crude oil and our federation accounts bloat and deflate from government to government. The rest is shared, primitively, between the central and state governments. The people remain in perpetual abjection and squalor, while those who lay claims to ruler-ship wallow in absurd opulence. No one outside of government is persuaded that the removal of subsidy will improve the economy. Instead, people believe that subsidy, if it indeed exists, is a token welfare return to the people and perhaps a visible way government can make them benefit from the oil which is a natural endowment from the bowel of the earth-their earth. This may appear pedestrian, even lay-man, but the veritable argument is that the oil wealth of the nation has become a doom indicator rather than the boon that it appears to be, on the surface. The summary is that the unplanned and unstructured withdrawal of subsidy carries tragic implications. The hunter’s warning, from all and sundry is that government is playing with fire, concretely and metaphorically, if it carries out its threats to embark on some kind of phased removal of subsidy. A sensitive government, that is currently battling with mortal survival challenges of insecurity that have put Nigeria in the eye of the world, what analysts describe as being on the world’s watch -list, will make hay slowly on this subsidy removal policy. Alas, it would appear that the advisers—economic advisers- of the President assure him that the policy is the greatest thing that can happen to the nation’s troubled economy, if certain palliative measures are taken. Recently, in discussions on the expediency of revenue generation for the nation between the NNPC and the Federal Inland Revenue Service (FIRS), the former took an anti-subsidy removal stand. FIRS is persuaded that the proposed deregulation of the downstream sector of the nation’s oil and gas industry, especially the removal of subsidy on petroleum products, will accentuate the country’s economic disaster. NNPC, without any tenable statistics, builds hope on subsidy removal as a sure way of job and employment creation as well as enhancing investment opportunities. FIRS’ position is in concert with the stand of Labour and most sectors of the economy. The voice of caution in the street is that the wages of subsidy is chaos, death and an interminable season of discontent. Government thinks otherwise. The State is on a lobbying spree, seeking soft-landing measures for the people after subsidy has become a policy. Government seeks favourable support and endorsement from the nation’s leaders of opinion and weighty voices.
Diezani Allison-Madueke, Minister of Petroleum Resources, who was the former Minister of Transport (who shed buckets of tears on seeing the deadly condition of the Benin-Ore road and who ended her term without successfully rebuilding the road,) has presented the effort of government to soften the effect of the policy that must come. She wooed the masses with the plan not to remove subsidy on kerosene and domestic gas. Note that the queues for kerosene at petrol booths lengthen by the day, even before subsidy goes. Allison-Madueke had promised, while facing Senate over her ministerial appointment that government is spending nearly a trillion on fuel subsidy, yet, it would not remove the subsidy without dousing the pain that the removal will certainly inflict on the common man. Her government indicts corrupt businessmen and independent marketers for whom imported refined petroleum is being subsidized but who go on to inflate buying prices on the is customers. Even government officials know and whisper it in hideous corners that certain privileged Nigerians who have oil grids benefit from every jot of petroleum product that is sold in Nigeria. The nation is perturbed by the failure of government to bring reprisals upon to those corrupt elements she so clairvoyantly discovers as the wreckers of the economy. Quite rightly, former Labour war-lord, now Governor of Edo State, comrade Adams Oshiomwhole, charged government to show sincerity of purpose in her threat to deal squarely with those benefiting from the oil rackets by naming those perpetrators. He decries the secrecy in which government shrouds its actions, including the oil subsidy palaver. The groundswell of support that government anticipates for this obviously unpopular policy crumbles by the day, but the dog still cannot hearken to the hunter’s trumpet, alas!
Government must do itself and the rest of the nation some basic favours by coming to the clear on what subsidy truly represents; its quantum, its beneficiaries and the fate of the common man in the aftermath of subsidy removal. Lawson Omokhordon, in his piece in The Guardian last Monday asked some pertinent questions in this regard. He wanted to know what quantity of refined oil is produced by the refineries in Nigeria and the cost of the refined oil. He asks for the cost of production of kerosene (DPK). He also draws examples from other OPEC countries such as Qatar, Libya, Venezuela, and so on and affirms that all these oil –producing countries have ‘functioning and efficient refineries to produce petrol, diesel and kerosene for their domestic economies.’ He demands that they declare their cost of production before their people. The argument is that there is need for believable accountability and transparency in public life and with due regard to petroleum matters—before inflicting needless pains on an already traumatized citizenry.
The bottom-line is that the Nigerian populace is not persuaded that the so-called N1.2 trillion to be saved from removed fuel subsidy will be prudently used for the benefit of the masses of the people. Government says it will put together respectable and eminent Nigerians to monitor and advise on the disbursement of the saved funds from subsidy removal. Most people think, from experience, that such exercise is futile and trite. The verdict is, to all intents and purposes, that government should let subsidy be. I cannot agree more.