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Giving Fuel Subsidy A Bad Name

10/15/11

Giving Fuel Subsidy A Bad Name

*Nigeria: Giving Fuel Subsidy A Bad Name

By Kali Gwegwe

I have, over the last twenty-four months written severally on the need for government to maintain the current fuel subsidy regime. My main argument has been that Nigeria’s socio-economic framework is still too fragile to absorb whatever shock that may arise from further increases in the pump price of petroleum products. I am not unaware of the fact that the income and welfare of Nigerians have not improved for a long time.

As at March 2009, the National Bureau of Statistics (NBS) reported that about 10m Nigerians were unemployed. This figure is disputable. It reported a mere 19.7 employment rate. Sadly, unemployment has continued to be on a steady rise in the country owing to a number of critical factors. The volume of economic expansion has not been robust enough to correct the causes of growing unemployment in the country. Some of the major factors contributing to high unemployment figures are pandemic corruption in private and public sectors, high cost of doing business, poor power system, insecurity, lack of access to financing, high interest rate, and dilapidated public infrastructure among others. All of these have in turn helped to promote the negative culture of poverty, hunger, crime, disease, and underdevelopment.

It was in the midst of this sad reality that Goodluck Jonathan contested and won the 2011 presidential election. For one very simple reason, Nigerian masses wholeheartedly welcomed with both hands, the transformational agenda of President Goodluck Jonathan. It was aimed at alleviating the long time suffering of more than 60% of the nation’s population that literally sell their own blood in order to provide food, clothing, housing, transportation, education, and health care for members of their families. ( Continues below….. )

President Goodluck Jonathan of Nigeria

Photo Above: President Goodluck Jonathan of Nigeria (2010 - present)

The transformational agenda started well with a “zero tolerance for corruption” posture. For the first time, a large cache of “untouchables” were arrested and docked for issues bothering on graft. Deliberate efforts are also being made by government to diversify the nation’s economy through practical steps to discontinue our reliance on the unpredictable revenue from oil and gas. Another highpoint of the transformational agenda of the Jonathan-led administration is the renewed vigour towards fixing the very important power sector through increased funding and other complimentary instruments and policies. To crown it all, government found it wise to increase the basic salaries of workers after coming to the realization that the nation’s present socio-economic framework was too weak to support majority of households in the country meet their statutory obligations.

Owing to the ignoble activities of a few but powerful persons working with foreign collaborators, four of the nation’s refineries located in Rivers, Delta, and Kaduna States were systematically sabotaged in order to promote a needless fuel importation business. As the world’s sixth largest producer of crude oil, we have no reason to import petroleum products at all. As a matter of fact, Nigeria is importing petrol and kerosene today because government has lost the battle of “will” to a tiny group of people that feed on the common blood of Nigerians. Instead of going after these enemies of the nation, government is being stampeded into harassing hapless citizens through the arrogant attempts to remove fuel subsidy. ( Continues below..... )

Nigerians queue up to buy fuel at a filling station

Photo Above: Nigerians queue up to buy fuel at a filling station.

Signs suggesting that government have lost the soul of the nation to a small clan of greedy and heartless Nigerians and their foreign accomplices emerged when the governor of the Central Bank, Mallam Lamido Sanusi called for the immediate withdrawal of fuel subsidy shortly after resuming office. His major plank of argument was that only a “tiny cabal” was benefiting from the huge subsidy paid by government. I strongly disagree with Sanusi’s opinion. It is quite regrettable that the CBN governor will in a cheap attempt to push his opinion through, dismiss and bury the fact that millions of Nigerians benefit from the subsidy government pay on petroleum products. For the few people like him that does not dip hands into their bottomless pockets to buy petrol, he may find it convenient to deny the benefits of fuel subsidy. This kind of attitude displays the mien of the average top government official.

The truth is that, there are millions of Nigerians, including bus/taxi drivers, small scale enterprises, Okada riders, hair dressers, restaurateurs, hoteliers, and even religious organizations that save about N90 for every liter of petrol they buy. No person or amount of propaganda can drown this fact in a pool of insensitivity of a few well-heeled government officials. A lie will always remain a lie, no matter who tells it. This clarification is very important because of the high amount of respect President Jonathan has for his aides and other top government functionaries.

Sometimes, government officials acting the script of third parties can deliberately give counsels that will put their principals in problem. The president should therefore take heed of this and ignore any policy that will put more holes in the pockets of ordinary Nigerians. In everything, let him stand with the masses. Events around the globe have shown that power actually belongs to the masses. I am tempted to believe that the enemies of Nigerian democracy (they are many) will take advantage of the expected uproar that will greet the removal of fuel subsidy next year to incite the masses to ask for the resignation of the president. These are some of the reasons why the president must be very cautious with the suggestions he receives from his advisers, ministers, and other top government functionaries. ( Continues below….. )

Sanusi Lamido Sanusi

Photo Above: Governor of Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi

The unilateral position of Sanusi concerning the removal of fuel subsidy was emboldened by the coming of Dr. Okonjo-Iweala as the Minister Finance in August, 2011. She too has been in the forefront of calls for the removal of fuel subsidy. I am not surprised owing to her background as a senior World Bank staff. The World Bank is a tool used by the West to promote and protect their economy. Unknown to many, the economic independence of Africa will be a threat to the West. They will hide behind any veil to destabilize the continent’s polity and economy. Some of these veils include Austerity Measures, Structural Adjustment Program, and Currency Devaluation.

Currently, attention has been shifted to the National Assembly. The minister of Finance is investing so much energy trying to convince the legislators on the need to remove fuel subsidy. Let them not be deceived by paper logic. Governance is more of a practical thing than paper logic. They should not be swayed by the beautiful pictures Okonjo-Iweala usually paints about Europe and America. If Nigerian workers earns as much as their contemporaries in those countries, nobody will complain about buying fuel even at N200 per liter.

Sadly, the latest call for the removal of fuel subsidy came from the Nigeria Governors Forum (NGF). According to its chairman and governor of Rivers State, Rotimi Amaechi; the fuel subsidy was enriching only a few people. I strongly condemn the series of lapses that have led to Nigeria becoming a petrol-import-dependent country. However, there is no way those who import petroleum products will not make profit. It is the huge profits these importers make that cause Sanusi and Amaechi to argue that only a tiny number of Nigerians are enjoying the benefits of fuel subsidy. This is a very faulty way to analyze issues and draw conclusion. It will be too wrong for government to sacrifice Nigerian masses just to “fight” those who milk Nigeria through the subsidy they receive from importing petroleum products to service the high demands in the local market. ( Continues below..... )

Nigeria Finance Minister Ngozi Okonjo-Iweala

Photo Above: Nigeria Finance Minister Ngozi Okonjo-Iweala

There is also this suspicion that some persons and companies involved in the importation of petroleum products do collaborate with some government officials to engage in sharp practices that is costing the country trillions of Naira. There are also cases of smuggling of petroleum products out of the country. All of the factors enumerated above are reasons why the CBN governor, NGF, and minister of finance want fuel subsidy removed. If our refineries are working at optimum capacity, we would have no reason to import fuel and spend huge amount on subsidies. The Nigerian masses should not be forced to pay for the inefficiencies of government officials and organizations.

One fact that has emerged clearly from all the calls for the removal of fuel subsidy points to one direction. The nation’s fiscal policy formulators and advisers do not have regard for the Nigerian masses. They are therefore easily persuaded to take a pro-elitist stand each time the need for national transformation arises. In fact, they see the masses as inconsequential in the greater Nigerian Project. This is one strong reason why President Jonathan must be quick to dismiss whatever idea or suggestion that will cause him not to stand with the masses.

It is also a huge fact that the nation’s policy formulators, special advisers, and senior special assistants to the president are either lazy or ran out of ideas. The only option left for them is to take hold of the jugular of hapless masses by rooting for the removal of fuel subsidy. They see it as a short cut to fixing the nation’s frail socio-economic framework. Like I have suggested elsewhere, the phase has come for government to make the affluent bear the burden of nation’s transformational agenda for the first time in the history of the country. Since independence in 1960, it has been the suffering masses that carry the burden of the nation’s political and economic experimentations. ( Continues below..... )

Map of Nigeria

Photo Above: Map of Nigeria showing some major cities, including the Federal capital (Abuja or FCT)

There is no doubt about the fact that the withdrawal of fuel subsidy will save billions of Naira for government to invest in other critical areas. However, the other side of the coin is that majority of Nigerians are too poor to buy a liter of fuel at N150. These are persons that earn less than $2 a day. It is with this $2 that they pay for the feeding, rent, clothing, education, and medical expenses of their family members. Withdrawing fuel subsidy at this time will definitely increase the level of poverty in Nigeria. The gains of the new minimum wage of N18,000 will be rubbished by the hike in the pump price of fuel.

Like I have suggested in my other write-ups on this same issue, those pushing for the removal of petroleum subsidy would sing a different song if they were earning even N100,000 a month. Many persons in the “president’s team” are not on the same page with him. Ordinarily, their opinions are supposed to be shaped by the pledge of the president, which is to “stand with the masses.”

Instead of strangulating the poor and hapless masses to raise additional money to service the nation’s socio-economic framework, government should pay more attention to the development of the non-oil sector of the economy. This should be done by energizing the private sector to perform at optimum capacity. This will however mean having a robust power groundwork, cheap access to credit facilities, lower interest rates, improved security of lives and property, friendly tax regime, and a sound transport infrastructure among others. With these fiscal policies, the economy will pick up and help create jobs and improve the welfare of the citizenry. It is at this point that government can contemplate the removal of fuel subsidy. By then, the nation’s socio-economic framework would be able to absorb the shocks that would come with it.

Kali Gwegwe, CEO, Nigeria Democracy Watchtower writes from Yenagoa, Bayelsa State and can be reached at kali.gwegwe@nigerianfootballpost.com ( 0806 407 4810 )

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20 comments

Comment from: Mr. Obi E.I Obi [Visitor] Email
Mr. Obi E.I ObiMy heart really weeps each time i foresee what nigeria will become tha next minute, a nigerian musician sang a song"nigeria jagajaga" and he was summoned with a serious warningnever to sing such again, now what is happening? That common Ghana whose departure set in the bag "Ghana must go" as a resualt of been enslaved to nigerians is is today a place where top nigerians now push their children to for good education. Even poor libya. Pls. My people, its time for protest get ready lets run the show.
10/15/11 @ 19:36
Comment from: Femi [Visitor] Email
Femi@ evry point in tym subsidy removal is mentioned, i jus cnt x plain d rationale bhind d idea. Does it mean dat dere cnt b beta ways of dealin wit dose so called few individuals... As an economist i clearly undastnd dat d drivin policies of any govt should b welfarist,sanusi,iweala are economist and its a shocker 2 me dat dey come out n make statements backin subsidy removal. Truth is nigerians will SUFFER if dis tin scales thru
10/16/11 @ 03:45
Comment from: Teinbai [Visitor] Email
TeinbaiI feel that goverment take more pleasure on the increase of poverty. Yes! That fact is undisputed because as small as Ghana,things are well managed. Ok, what is the hope for the common man?
10/16/11 @ 04:25
Comment from: Felix Oiwe [Visitor]
Felix  OiweThe call for the remover of fuel subsidy is a political calculation by this government. Believe it or not any attempt to force this down the throat of Nigerians will spell doom for this government.

Who ever is advising this government on this should be honest enough to advice it on the need to invest in building more refineries so that we can refine our oil for domestic use before contemplating remover of subsidy.

Undermining Nigerians that we not do anything about it will be a joke made too far remember the world is now a global village what is happening the Arab world is an eye opener so the authorities should be careful

From Comrade Felix Owie in Lagos
10/16/11 @ 04:27
Comment from: Onuoha iyk [Visitor]
Onuoha iykremoval of fuel subsidy will drawn the economy to a trough stage. Federal government should look at the economy with abreast measure. In retrospect, l could remember when agriculture was the main stay in nigeria. Yet there was no recession in the economy. F. G make use of the farm produce to run government. I think we should go back or rise from where we have fallen. F. G should alowed fuel subsidy to gain its value for dear life of the poor massess. And let the bourgeois and the hegemonians in the society be fish out and punished for stable economy.
10/16/11 @ 06:01
Comment from: Alhaji Ali Yahaya Isa [Visitor] Email
Alhaji   Ali   Yahaya   IsaGOvernment of Goodluck trying to give Nigerians Badluck. Back to sender. Look Before You Leap: Remember Egypt? Libya? Etc, If told to double fuel subsidy and continue to harass, intimidate and oppress the people, they would have doubled fuel subsidy 10 times!!!!! A word is enough for even the Dumb
10/16/11 @ 08:21
Comment from: OKWODU, GEOFFERY [Visitor]
OKWODU,  GEOFFERYThank u Mr. OBI.E.I OBI (VISITOR), for your comment.I agree with you, this is the best time for Nigerians to stand up and run the show.
10/16/11 @ 11:50
Comment from: uma victor [Visitor] Email
uma victorMr. President. Sorry to say this. members of d legislatures,executives,and even the judiciaries needs mental evaluation. Some governors are sick already. I fore see 2012 as the year of up rising from Nigerian youths. Plz Mr president dnt let dt happen.
10/16/11 @ 13:47
Comment from: Seun [Visitor]
SeunDr. Iweala's interest is in advancing a policy that improve on the Nigeria people.
10/16/11 @ 16:06
Comment from: kennedy oboirah [Visitor] Email
kennedy oboirahIts my fervent prayer that this issue of oil subsidy does not cause more harm than good to our dear country. We need to tread very softly or regret our collective action[s] for ever. Iam of the view that we should for once give our leaders the benefit of the doubt. A Generation of Nigerian must make sacrifice for a future Generation, and i think it behoves on us to take the bull by the horn and make the necessary sacrifice. Nothing is too much for us to do now in other to garantee a better future for our generation to come.Nigeria will be great again. Cheers


10/16/11 @ 17:26
Comment from: sorochi agaptus anyanwu [Visitor] Email
sorochi agaptus anyanwuI feel ashame of the debate that is going on in the country on removal of fuel subsidy,with our leaders drawing their references from a great nation like USA and Europe where services are paid pay hour with the list payment not less than 10 eros per hour to country where one hardly received two dollar a day and more than half of the nation is stuck in perpetual unemployment and living with total decaying infrastructures and putting their life in danger,choosing death instead of life just to have food on the table to support life and to live.Millions are outside the country committing one atrocity or the other against their own will and choice but all just to survive,Our national passport is more dangerous than a nuclear weapon in any embassy or airport,why few are their lotting the country resources and stealing billions of naira yet making laws without critical analysis.Mr.president any further attempt to vitimize and alleviate sufferings and weepings of the common Nigerian anymore the beginning of the harvest will be just like the end of what is current happening in Libya.NO ONE EVER IMAGINE A SUCIDE BOMBING IN NIGERIA BUT NOW IS THE ORDER OF THE DAY.
10/16/11 @ 22:09
Comment from: joseph [Visitor]
josephi hope Nigeria remain a nation by 2012. I never believe in Mr president from day 1. Look at history, there is no major project accredited to his name from the beginning till date.
10/17/11 @ 03:57
Comment from: Sir Hitler [Visitor]
Sir Hitler"Owing to the ignoble activities of a few but powerful persons working with foreign collaborators, four of the nation’s refineries located in Rivers, Delta, and Kaduna States were systematically sabotaged in order to promote a needless fuel importation business. As the world’s sixth largest producer of crude"I am qouting the WRITER again in oder to emphasize this point. Who knows how many refineries that Nigerian is having in foriegn countries build by government officials , may be even with their names on the documents as illegal owners. Take an example of the recent news of Nigeria going to build refineries in Indonesia, in oder to export oil from there to Nigeria. Is that not equal to treason? Tell me which of the oil producing countries on earth does this kind of thing. You see the political class do not love or care about their Country NIGERIA. Nigeria is over populated with almost 80 Million people unemployed, but ask the world bank worker called the minister,if she is honest , she will tell how much stolen money some politicians from Nigeria are having outside Nigeria in foriegn banks. This is a country with less than 1 PERCENT in the world trade and yet you want to remove oil subsidy, tell me are most countries on earth not practicing subsidy? This is an indirekt way of allowing the poor mases benefit from the government.
There should be an alternative transportations systen like city train, underground stations or the tram , so the people could hav a choice and the pains by removung the subsidy will be so bad.
10/17/11 @ 05:14
Comment from: Seun [Visitor]
SeunDr. Iweala is just giving an expert advice and not just being in the forefront of pushing for removal of fuel subsidies.
10/17/11 @ 05:26
Comment from: Sir Hitler [Visitor]
Sir Hitler@ sorochi You have hit the nail at the head. But you see as you make your bed so you lie on it. The country has been looking too deep in the Koran and the Bibel for so long and it is time to look forward and take our destiny in our hands. The winner takes it all attitude of the government is killing the confidence of every Nigerian , and causing so much suffring to the Masses .The result is that we are mistreatet and disregarded all over the world. charity the say beginns at home. An average Nigerian does not know his or her right and the politics is capitalizing on this ignorance to enslave their own people , who voted them into power.
10/17/11 @ 10:22
Comment from: KISINGTON [Visitor]
KISINGTONThe cry for the removal of fuel subsidy is an indication of insensitivity of the elites towards the suffering of the masses. Having more money in the purse of GOV is not the solution to our socio-economic problem,rather, the Gov should re-define her policies, fight corruption and make politics less lucrative. The cry for fuel subsidy removal (if it exists) is in no way a solution to our problem at the moment. President Goodluck should please disregard such satanic advice that will only succeed in disengaging him from the love Nigerians have for him.
10/18/11 @ 03:48
Comment from: Olawale olanipekun [Visitor]
Olawale olanipekunRemoval of the fuel subsidy will be a great burden to the masses.Its not about the quick income to get from it, but all about the pains and the grief that will cause the average Nigerians
10/18/11 @ 08:59
Comment from: chioma judith [Visitor] Email
chioma judithI am crying already for what is going to happen in nigeria but i know that GOD won't allow such
11/07/11 @ 13:22
Comment from: joel Ajani from zaria, 07038918814 [Visitor]
joel Ajani from zaria,   07038918814well, unarguably, a lot had been said on fuel susidy but i will only say let d masses giv d GOVt a benefit of doubt to see d outcome of their proposal. You see,every human being is 'homus-economicus' meaning we preferred pleasure dan pain. To what i can forsee, what hapend to nitel wil soon happen in oil sector. Just b vigilant and u will b glad u did bcos a big man who has six jeep will b d 1 to bear d burden if it is removd. Ask urself how much do u consume on fuel den u wil apreciate wat am saying. In conclusion, let it b remov bcos it only benfit d thieves.
12/08/11 @ 16:16
Comment from: School of the rugged [Visitor] Email
School of the ruggedAll the top official in Nigeria.. from the president, minister, senator, chairman, honorable, counsellor, must be set ablaze to make nigeria better.. if not.. we are just trying.. we cant meet up with other countriess... imagine Malaysia.. they are owning nigeria billions of naira.. still, there economy is of the best in the Asia continent.. what is happening to out refineries... Bullshit.. Jonathan Must Go..
01/11/12 @ 19:10

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