Fuel Subsidy: Realities that matter will not change

Eliminating fuel and electricity-based subsidies have been one of the greatest challenges confronting every successive governments since 2000 when the Olusegun Obasanjo – led administration first attempted it. Fuel subsidy was introduced in 1970 to ensure Nigerians buy petroleum products at optimal prices below the international market price.

Like every government, this present administration has attempted to remove fuel subsidies right from when it came on board, however, due to politics that often surrounds its removal, to this day it has remained with us. However, this time it seems the Buhari government has weighed the available options before her and decided to part away with the subsidies. The government has announced that from February 2022, it is ready to throw the bathwater of the ‘abiku’ call subsidy away without throwing the child along with it. What this means is that Nigerians will have to either pay  N340 per liter before they can access a liter of petrol or troop out in their masses to stage another protest at Ojota once again to resist any form of attempt to remove the little sugar in their mouth.

Fuel,  unlike electricity where Nigerians often pay for light in exchange for darkness, its subsidy has been the only government intervention that the poor citizens had  benefited from the largesse of national cake, and that’s why anytime the government tries to do away with fuel subsidy, It always sparked an explosive situation that flares up brick-wall of protest by the citizens who have had a taste of the spoils of the dividends of democracy that came their way since 1970.

In 2014,  when former President Goodluck Johnathan attempted to remove fuel subsidies which he said cost the government billions of naira monthly as of then it was thawed with stiffer opposition by the then opposition party, trade union, and the activists. But beyond this glaring issue is a government that couldn’t provide the necessities of life such as clean water, light, affordable healthcare facilities, decent intra commuters means  of transportation, affordable housing, security, and a cheap and affordable food supply chain. This highlighted in part why people are often quick to stage protests, the other part is the economy that has deteriorated to the point that people couldn’t afford everything that adds up to life, especially the most basic need of life: food and shelter. In the last six years or so the prices of foodstuff have skyrocketed to the point that bread, rice, egg, among others have turned to luxuryy on the table only eating occasionally, all thanks to the government’s uncircumcised economic policy that has further driven common people below the accepted poverty line.

More so, beyond this pervasive disillusionment is something far disturbing which has completely alter the metabolism of the people: the years of bullying, bruising, and battering of the people by government unfriendly policy has created a fearful apprehension which the politicians often exploit to the full during the election. Thus, the people had lost the ability to trust the government; that’s why each time a good decision is being taken on behalf of the people, it often thwart with a brimmed wall of opposition. Should we blame the citizens? Hell no, for years of government bullying has make life unpleasant for the masses.

If my brain will not betray me, this departure from the current pump price of N162 is more than a 100% increase of the new pump price. Many have justified this new price change that it reflect the average price of gasoline across different countries of the world but fail to consider the stringent conditions of living here compared to those countries they often compared us with. The populace be it citizens or immigrants, often benefited from wages far above ours, stronger price purchasing parity, life and disaster insurance policy, per capita income, quality education, affordable housing, healthcare facilities, the standard of living, and social welfare that allow them to have a good quality of life. And also, the argument that the rich benefited more from the fuel subsidy doesn’t add up. Yes, in their evil strategy to make more money, sometimes, a certain percentage of the fuel volume imported into the country is often smuggled across the borders for sales.  This is because our neighbors beat Nigeria on cost rivals yet Nigeria pays the fools price on non-existing fuel. In any case, is this enough reason to remove fuel subsidies?  Why can’t the government clean up the corruption? Why should the poor citizens always be the ones at the receiving ends of the government inefficiency? Why should the citizens be punished while the political class continues to live in denial of the existence of the crisis we are currently in, yet earned bogus and underserved salaries and live an opulent lifestyle.

Meanwhile, to cushion the effect of fuel subsidy removal, the government has announced its plans to pay N5,000 to 40 million from the bulk of the country’s poorest of the poor. To me, this is a lazy man’s approach and it seems we are moving in a vicious circle that will lead us nowhere. First, the options before us are not fit for our situation given our propensity to corruption, no doubt, only a little fraction of the money will reach the targeted group.  As history doesn’t lie, the two hundred billion this money amounted to rather than reaching the poorest of the poor, will end up in the pocket of the elite subcontracted for the job. History, as we have seen, is littered with examples of this kind of intervention that failed. We all know what happened to covid-19 palliatives. It’s very unsustainable and bound to fail even before starting. More so, as we have seen, dispersing money in the name of social intervention doesn’t guarantee that it will end up in the hands of those it targeted. Is it not better to invest it in something that will outlive this government?

Besides, there are several issues that one would have expected this government to tackle before embarking on fuel subsidy removal; which is not outrightly bad given the situation at hand but the first thing one would have expected the government to do is to privatize all the moribund refineries to make way for an improvement,  efficiency, optimization, and commercialization.

Interestingly , this country has four refineries, the first refinery bult in Port Harcourt has a capacity of 60, 000 barrels per day while the other one still in Port Harcourt has a capacity of 150, 000 barrels per day, the Warri Refinery has a capacity of 125, 000 barrels per day, and the Kaduna Refinery has a capacity of 110, 000 barrels per day making the nation’s total refining capacity amount to 445, 000 barrels per day if they are operated at ideal capacity but today, all the four refineries are in comatose despite the billions this government has spent on turnaround maintenance.

Moreover, one would have thought the government would prioritize privatizing these moribund refineries to increase their capacity optimally to fill the gap created by the lack of having a functioning one to remove the multi-dimensional upshots of fuel subsidy on the country’s lean resources. Sometimes I wonder about the kind of discussion taking place in the national executive meetings where policy and actions of government are often debated to make an informed conclusion.

Similarly, the other option becomes clear that the second option would have been that the government partner with the state government to establish a decent fleet of comfortable and safe means of intra carrier across the country for all Nigerians instead of paying subsidies that will reach a few people or certain parts of the country than the other. One, It will save the country more money and at the same time provide employment opportunities to the teeming population. Secondly, it would allow the government to dis-congested our much populated and polluted cities when we all put our cars on the road day and night. Meanwhile, if the government invests in an efficient and affordable public transportation system, It will relieve the poor from the impact of high transportation in commuting from one part of the country to another, and within cities.

If the subsidy is removed, it means one thing, the price of goods and service in the market across the country would skyrocket by the new price of petroleum, the burden will squarely be on the low-income earners in terms of transportation cost and quality of life. Therefore what the poor need at this time program that will  ease that burdens of the high cost of transportation that would come along with the new price regime given that our transportation industry is still fossilized with fossil fuel and not miserable 5000 naira.

Finally, without any attempt to water down the infrastructural achievement of this government, one would have expected this government to conclude its train revolution across the country to ease the burden of transportation costs on the low-income earners. Investing in infrastructures such as good roads, affordable health care facilities, housing units for the poorest of the poor without having to pay through their nose, then If the government take away the fuel subsidy, no one would blinked an eyelid, but without any of these things in place that would make life easy for the citizen given the current harsh economic realitiess where in there more people have been push below the poverty line than in 2015 when this government came on board , giving cash to poor people instead of creating an economy that would create things that create wealth and make their purchasing price parity to be stronger,that would amount to wastage of resources.

In my honest view, what I consider to be an effective form of intervention to cushion the effect of subsidy by a government that cares to improve the social welfare of its citizens is improves in the public service delivery like social welfare directed to the poorest of the poor without the middlemen such as the provision of the affordable health care system, wages, well structure education and empowerment without any political leanings, this will remove a certain proportion of citizens from poverty and diseases and not the sharing of trader moni, market moni that will end up in the pocket of the elite. To me, that’s what it means to cushion the impact of fuel subsidy if at all we all decide to let it go and not one miserable N5,000 that can’t cook a pot of soup. And to me,  that’s like scratching the corn at the back of a basing and what the yorubas would call ‘ai ni kan se’.

 

Adediji Wasiu, sent this piece from Lagos State, Nigeria