WHATEVER the school of thought, fuel subsidy and apt pricing of petrol has been a knotty issue to governments in Nigeria.
NO matter the divide from which anyone appraises the matter, what Nigerians get in the pricing of petroleum products is a cumulative of the cost of leadership the perennial volatility in global oil market. That is why all the mantras in which successive regimes hive every increment fly in their face. Call it deregulation or removal of subsidy, each tinkering boils down to the price of leadership or poverty of understanding.
SINCE 1978, when General Olusegun Obasanjo declared the pump price of petrol as N0.05k per litre to when Alh Shehu Shagari increased it to N0.20k between 1979 and 1983, there has been no looking back by their successors.
Perhaps, that is why despite relative stability in pump price of petrol when Gen. Muhammadu Buhari, then Head of State retained the rate at N0.20k for a period of two years as did his successor, Gen. Ibrahim Babangida, who left petrol at N0.395 per litre between 1985 and 1989, who took no time to see a cashcow in pump prices. Hence, he sold petrol to Nigerians at N0.60K per litre in 1990, N0.70 in 1991, before jacking it to N3.25 per litre in 1992, and finally at N11.00 by time he stepped aside in 1993.
SURPRISINGLY, Gen. Sani Abacha did not tamper with the price regime he ‘inherited’ from his predecessor as petrol sold at N11.00 per litre in remarkable stability throughout his five years in office between 1993 and 1998.
BUT during the reign of Gen. Abdulsalami Abubakar, he increased pump price of petrol to N20 per litre in 1999, before President Olusegun Obasanjo upped the ante by subjecting the product to annual ritual of increment. This saw Nigerians buying petrol at different prices every year in the entire eight years. Obasanjo held sway as president in Aso Rock. From N22 per litre in 000 to N26 in 2001, N30 in 2002, N40 in 2003, N55 in 2004, N60 in 2005, N65 in 2006 and N70 in 2007, there was a free reign of upscale of petrol prices.
FORTUNATELY for Nigerians, reprieve came their way when Alh Umar Yar’Adua came to power and mustered the political will to revert pump price of petrol to N65 per litre in 2008 and leaving it at that up until 2010. But unfortunately, this respite turned short-lived as his successor, Dr. Goodluck Jonathan could ‘manage’ that rate only for 2011, before imposing a nearly 100 per cent increment to sell petrol at N120 per litre in 2012 through 2013 to 2014, before handing over to President Muhammadu Buhari at N145 per litre.
IT WILL be recalled that Buhari had clawed back the pump price of petrol during the national lockdowns induced by coronavirus pandemic. This was when a litre of petrol was sold between N138 and N140 per litre. But just when households and firms were beginning to crystalise their economic projections around this price regime, Buhari dropped a bombshell in a kamikaze fashion that is seemingly returning the nation to the familiar arbitrary increment of pump price of petrol. Petrol has since been selling at N160 per litre in most filling stations in Nigeria.
AND predictably, the nation has returned to the days of long knives as crucial stakeholders in the oil and gas industry are singing tunes that no administration would find tuneful. Threats of strike have been coming from different amalgams of organised labour who are striving to force government’s hand down.
OF COURSE, as his predecessors laboured to explain away their own increments in petroleum prices, Buhari is leaving no stone unturned. He blames fuel subsidy as bane of stable price regime of the product. Many say he would be eating his own words to suddenly accept that fuel prices were actually being subsidised by his immediate predecessor, contrary to his public pronouncements that there was nothing like that when his predecessor, Dr Goodluck Jonathan was explaining to Nigerian masses the import of removing the subsidy completely. At this juncture, one may be tempted to ask what happened to President Buhari’s avowal during his campaign to fix the refineries when he comes to power.
WHATEVER is the case, the underlined factor currently is that Buhari is saying nothing new. Just like Obasanjo latched onto ‘deregulation’ in trying to win the argument, only to end up reducing the word to mere sloganeering, Buhari has seen removal of subsidy as the one-size-fits-all sartorial remedy for the looming impasse.
TAKE Obasanjo’s time for instance, over $100 billion was spent on a Turn Around Maintenance (TAM) of oil refineries. Under this policy, contracts were awarded for total overhaul and revamping of the nation’s four refineries in Port Harcourt, Warri, and Kaduna. But the situation did not improve.
HENCE returns the point to where things had been. It appears that as long as governments allow people to circumvent the job of fixing Nigeria’s refineries, and opt to import refined petroleum products, they will resort to increment of petrol pump prices as to cover ‘overhead’ cost which, indeed, is the cost of leadership switch-off in Nigeria. It is evident that the current petrol pump price is not exclusive to the current federal government.
HOWEVER, we call for total rehabilitation of the refineries given that it is arguably the only escape from perennial increment of petrol price. We also call on federal government to consider the timing of the present increase and reconsider its stand in any negotiation with organised labour. This is because the lockdown associated with the coronavirus pandemic has dealt a terrible blow on poor Nigerians.
Working Nigerians are hurting and their livelihoods are in danger. Already, it appears Nigerians are being stretched to economic death since amid the hike in fuel price and electricity tariff, there is hike in value added tax, personal income tax, import duties, cost of pre-paid metre, and introduction of stamp duty, amid various levies of states and local governments.
WHEREAS government must go ahead with the new price regime, we recommend introduction of special palliatives that would cushion its collaterals on households and firms. Governments may do this by providing special mass transit buses that will operate at subsidised fares in cities and towns nationwide, among other social services.
THERE is also the need for government to implement a transparent system for redirecting and monitoring the use of funds from the fuel subsidy programme for citizens who wish to review and scrutinise the expenditure.