OBSERVATION: Before The Bubble Bursts

 

BY ADEMOLA YAYA

IN his inaugural speech on the 29th May, 2023 as the 16th President of the Federal Republic of Nigeria, Senator Bola Ahmed Tinubu said, “the fuel subsidy is gone” as its continuous payment is no longer justifiable aside the fact that there’s no provision for it in the 2023 budget onwards from end of June. Two days after, 31st May, a new regime of subsidy removal commenced with Premium Motor Spirit (PMS) also known as petrol starting to sell for N500 against the earlier N195 per litre.  Subsidy is a benefit given to an individual, business, or institution, usually by government. It is given to remove some burden in the overall interest of the public to promoting social good or economic policy.

It is a direct or indirect payment, economic concession by government to households, private firm to promote public objective. This is a standard global practice. United States government, for instance, subsidises energy, transport and agriculture. It particularly gives subsidy to farmers to guarantee foods supply all round the year especially corn, soy, wheat and rice. It subsidises green energy, oil, gas and electric cars.

Yes, I agree to the fact that subsidy on PMS in Nigeria is a scam that must go, as sharp practices of oil marketers have made continuous subsidy on petrol unreasonable. For instance, it is estimated that average petrol consumption in Nigeria is 60 million liters per day but the marketers of the products would load it up to as much as 100 million liters per day.

To keep the product at N195 per little, the government subsidises the marketers claims of 100 million liters which amounts to N1.2 trillion per month. They argue further that the marketers, having collected money for subsidised fuel from government, will divert large quantity of it to the neighboring countries to resell at international market price, as if they had not gotten subsidy, making the product scarce in Nigeria.

Hence, as they make money from FG, so they make from neighbouring countries. Instead of giving this huge money to these unscrupulous oil marketers who feed fat on Nigerian money, why not do away with it?  But in doing away with the subsidy, there must be a system in place that will jealously guide the throats of already choked and impoverished Nigerian people from being cut. After all, they are not responsible for the so-called scam.

As 2021 was winding up, the Federal Government led by President Muhammadu Buhari, had announced that by July 2022, it would remove oil subsidy so that the blind market forces would determine how much we would be paying per liter of fuel, based on same scam. Sensing the agonies FG was designing for Nigerians, especially the poor working people who were already living in hellfire, Nigeria Labour Congress (NLC), Trade Union Congress (TUC) and Civil Society Coalitions swung into action, mobilising for rallies and mass protests that were to commence from 27 January, 2022 against this satanic decision.

Realizing the consequence of impending mass protests, FG, through the immediate past Minister of Finance, Hajia Zainab Ahmed, said it would hold the fuel subsidy removal forthwith and work on the 2022 budget to provide fund for that purpose having realised that the “timing of the subsidy removal” would worsen the suffering of the people. It should be noted that Zainab Ahmed had earlier said FG would only make provision for subsidy from January to June, 2022. Based on the aforesaid, the Buhari led administration retained the N195 per liter of Premium Motor Spirit (PMS) as it made budgetary provision for oil subsidy till end of June, 2023.

As a President elected under a party that claims to be progressive, Asiwaju Bola Tinubu should have simply said in his inauguration speech, “There is no appropriation made for PMS subsidy after June 2023. However, since petrol, in Nigeria, is not like every other commodity as it affects every sphere of our lives, while recognising that subsidy is a scam indeed and must go, I’ll call all the stakeholders within this one month timeline – independent Petrol Marketers, NUPENG, PENGASAN, NLC, TUC – to a round table to discuss and agree on modality to salvage the situation so that the subsidy scam, which enriches the rich at the expense of the poor must go.”

A progressive President cannot say since budget provision was not made for it beyond June ending, it is therefore gone. No!  A people-oriented government with egalitarian principle needs deep thinkers to look before leaping. For instance, what will happen to June subsidy appropriation provision in 2023 budget when Mr. President inaugural proclamation has prompted new price regime in a month in which there is still provision for subsidy?

The fuel is so central to our lives that a responsible and responsive government must make it available and affordable. Before new price regime, for instance, I used to fill up my Sienna bus tank with 70 liters weekly with N13,650. Now, I will have to bleed out N35,000 for same 70 liter making N140,000 every month! This is simply not sustainable as I cannot afford it. Under this circumstance, my business of running around to put food on the table for my family and sending the children to school will be negatively affected! It is unfair for Mr. President to unilaterally inflict more pains on the people via petrol subsidy removal in the way it was done; it is against the letters and spirit of the preamble of 1999 Constitution of the Federal Republic of Nigeria, as amended, which he sworn to uphold.

It states, “We the people of the Federal Republic of Nigeria, having firmly resolved, to live in unity and harmony as one indivisible…..for the purpose of promoting good government and welfare of all persons in our country….do hereby make, enact and give to ourselves the following constitution..” Mr. President should revert to the old price of N195 per liter while searching for lasting solution to the problem as soon as possible. For instance, who are these marketers inflating imported subsidised fuel and diverting same for sales to neighboring countries? Are they ghosts that could not be arrested and prosecuted for socio-economic sabotage? Why do we have to put our fuel business in their hands? What has become of our four refineries which have gulped about $6billion as Turn Around Maintenance (TAM) between 1993 and 2023 without producing or refining any oil which has made the oil marketers to fill the gap? Why should the poor people pay with their blood for fuel simply because of marketers’ fraud as a result of conspiracy and negligence on the part of ruling elite to arrest and prosecute the culprits, as well secure the boarders? What can be immediately done to reduce the humongous cost of running government and relentless embezzlement of government fund? Emerging stories reveal that the money stolen from government coffers with impunity and without consequences makes child play of the subsidy amount.

It is importation of refined products, which is a sustained act of gross irresponsibility by the ruling elites over decades, that is responsible in the first place for subsidy. There would have been no subsidy issue if our four refineries are working. They are not working and no person is held responsible for that despite billions being spent on them. Why? Nevertheless, there are several options opened to soonest local refining, especially if a specialised deal is done with Dangote that we are made to believe is almost set for local refining. Contrarily, the emerging news is that Dangote itself is set to join in importation, now armed with a license to so do, a story that is better disbelieved!

Some state governments have announced to their workers and students to only come to work and school three times a week as the cost of transport has risen beyond the reach of the people. Majority of the people will inevitably be prevented from traveling to their villages for Ileya – Id el Kabir – which is two weeks away. For those who could not commit suicide or “Japa” because of this unsustainable high cost of fuel, they will be condemned to perpetual misery and the poverty index will skyrocket; crime and criminality will increase; their frustration and anger with the government will be bottled like a keg of gunpowder that can burst anytime.

Arab spring which began in Tunisia in 2010 is a pointer to this avoidable setting of bottled frustration, anger and agony that looks like an okay situation. Government should not be deceived that people have adjusted to the new killing fuel price as it is simply not sustainable, especially since there is no outlined action or defined timeline for delivering regular power supply or local refining of crude.

There is no arguing the fact that Subsidy on Petroleum Products must go and that President Bola Ahmed Tinubu is right and deserves support to end it. The basic issue is how? Of all the hows, it seems that the best has not been embraced, having been impatient not to even wait for the June end deadline in the budget, and having not exploited the benefits of wide consultation on practicable and more humane methods of ending the subsidy without punishing the masses for the inefficiencies and crimes of the ruling elites and their fraudulent business associates.

Democracy is supposed to translate to sustainable development and economic growth and infrastructures for happiness and wellbeing of the majority of the people and not subjecting them to more misery that will increase poverty in the midst of abundance which could escalate the already widespread turmoil.