Ending the fuel subsidy regime in Nigeria is a very good decision. It has been messy on our plate for some time. We all seem to have come to agree with this assertion. So, what is new in this? Even as the immediate impact of the sudden spike in the pump price of petrol across the country is the issue among Nigerians, we can all hear, see and feel the indulgence. However, among many of the posers in the whole issue of petroleum pricing in Nigeria are: What is new to us in all that we have heard so far about fuel subsidy, the need for its removal and who to do it? What is new? Or, put differently, what are the fresh angles?
Perhaps, the only thing that is new about this matter is that Bola Ahmed Tinubu is now the president of Nigeria or that we have only just discovered that former President Muhammadu Buhari didn’t have the balls they claimed he had to make hard decisions. One other new tinge to the tasteless fuel pricing issue that has been swinging back and forth before Nigerians is that now, we have agreed that it had been a crime all along and it’s time to put an end to it. We have also agreed that ‘subsidy must go’ but did not agree to let it go because of who was calling for its removal. It is hardly debatable that, viewed from the prisms of Ngozi Okonjo-Iweala, Kemi Adeosun, Deziani Allison-Madueke and Mele Kyari and all manner of people in-between, what we are we talking about in the Nigerian subsidy melee is in no way new to all of us.
However, as insipid as this vexatious Nigerian issue has become, we still have fresh insights to it. The Buhari administration has provided a huge load of fodder to the debate because it failed on every of its promises on subsidy and related issues. Since Nigerians have chosen to not ask questions of the All Progressives Congress (APC), the party that has left us in this mire, we move on and continue in our regurgitation of the matter. But while we chew the cud, should we not at least look wholly at the issue? Many Nigerians remember the trauma and pain of ‘innocent’ Professor Kamene Okonjo, who was kidnapped and threatened because of fuel subsidy removal. The old woman’s experience typifies the saying that “when a matter gets to its chaotic peak, even a bystander shares in the attendant troubles.” Ngozi, her daughter, shared her experience in her mother’s kidnap saga and said her mother was abducted because of the government’s plan to clean the messy subsidy payment system. No one has refuted her claims. So, Ngozi’s claims are the only facts available. Dr. Ngozi Okonjo-Iweala said her mother’s kidnappers had demanded that she pay the bogus fuel subsidy claims, resign from the government and leave the country. She said those were the only conditions given by the criminals to free her mother.
”At the end of 2011 an equivalent of $11billion was submitted as claims for subsidies by 143 marketers who were importing the product. These numbers were horrendously large compared to when I was first in government in 2006, which was closer to $2billion in subsidy. So we decided to audit these claims. We audited about $8.4billion worth of claims and we found $2.4billion of fraud in these claims. Many of these marketers were trying to claim $2.5billion fraudulently. With the full backing of the president and the economic team, we decided that we were not going to pay these claims.
“The pressure from these marketers was tremendous. We not only said we will not pay, we said we would clean up the whole mechanism for subsidy claims and put in place something more transparent, something clearer. This did not go down well with them. When we stuck to our position of non-payment and implementation of the new verification regime, these strong and well-connected vested interests were angered and seemed to blame me personally. There were personal consequences for this.
”My 83-year-old mother, a retired professor of Sociology, was kidnapped by four young men and held for five days. Keeping her wits about her because she was totally terrified, she asked them why she had been kidnapped. They told her ’because your daughter, the finance minister, refused to pay oil marketers their dues.’ The kidnappers negotiating with my brother demanded my resignation publicly. Then I should go on television and publicly announce my resignation and depart the country as a condition for my mother’s release.”
Stories like these are familiar. We have our different subsidy stories. The January 2012 anti-subsidy protests are also familiar. The gains Nigeria has made from these episodes might be some of the new insights.
At its denouement, the Buhari administration asked the National Assembly to approve a $800million loan. The government said it was meant to provide palliative measures to cushion the effect of the removal of fuel subsidy. There were faint reports that the loan was approved but that it would be utilised by the new administration. President Tinubu was reported to have announced on Thursday that palliatives should be rolled out. This came after days of confusion that followed his abrupt announcement of the end of the subsidy regime in Nigeria.
All we had been told before now is that the no-subsidy time will start after June 30th. The 2023 budget also provided for fuel subsidy up to the same month. We might have been saved this sudden subsidy mess with neither an explanation of the policy nor the fate of the budgetary provision. If the government is unwilling to see implement the budget as it was passed and signed into law, why is the government not approaching the National Assembly to seek means of achieving this?
A price template was circulated by the NNPCL. If we have deregulated, why is the NNPCL fixing pump prices? This was also the question of organised labour. Should it not be that the marketers should sell according to what they bought? If the NNPL is the only fuel importer for now, and had said it has supply till December, on what subsidy terms did we import the available stock? Why would the NNPCL or the government fix prices for marketers? Shouldn’t the NNPCL leave the pricing as it were and begin a new price regime at the end of June which was the promised time? What is the price ex-depot? There is no information on how much marketers buy at the depots. Some marketers have hinted that they often don’t know how much they would get the product at the depots. So, how did we arrive at the price disclosed by the NNPCL?
In addition to all of these, we do not even know the quantity of petrol we consume in the country daily. The Group Managing Director of NNPCL, Mr. Mele Kyari, doesn’t seem to know the exact amount of petrol consumed daily in Nigeria. If Kyari does, he has chosen not to disclose it and this doesn’t promote accountability. Kyari tells us humongous amounts of money the NNPCL owes without telling us exactly how the debt was arrived at.
If we know the truth about the amount of petrol we actually consume in Nigeria, the exact figures can be arrived at. All these are the things the government needs to educate Nigerians on. Nigerians also need transparency in these fuel supply dealings by Nigeria. For now, everything looks like: “I’m not in this world to live up to your expectation, neither are you here to live up to mine.” Peter Tosh sang that in “I am that I am” in his album, Equal Rights.
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