The oil subsidy question in
the country has now assumed the legendary status of the tortoise that is
central to every African folklore. The country is going through another
lock-down with the fuel pumps short on supply; petrol being sold at
exploitative prices, and as always, with the Christmas and New Year holidays
close by. The argument is the same old one: that the government has yet to pay
the backlog of subsidy owed to the marketers and for that reason, the marketers
are unable to import refined fuel into the country. The irony of the claims is
ridiculous, against the backdrop of a country with four refineries which,
unfortunately, are unable to meet even a reasonable fraction of the populace’s
needs. And this, due to no more than contrivance of the nation’s thieving elite
that had seemingly prevented the oil majors from involvement in the downstream
sector.
Yet, oil marketers’ regular
claim that the government owed them unpaid arrears of subsidy and their
subsequent demand for payment remain at loggerheads with the conviction of many
Nigerians, backed by logic and sometimes official findings, that oil subsidy is
a scam and hardly exists. The government recently paid out about N200 billion in
order to restore normalcy, only for the marketers to demand another supposedly
outstanding N500 billion. Curiously, there is no consensus on what is actually
owed the marketers, thus making the oil subsidy an opaque issue. The government
has more recently approved N413 billion payment to the marketers.
Sadly, fuel subsidy in this
country has become more of an imaginary supplement that government pays on the
importation of refined petroleum products, especially petrol, kerosene and
diesel in order to cushion its effect on domestic consumers. The argument is
that what the Nigerian people pay domestically is far below the international
price for a product exploited in Nigeria and therefore, Nigerians must pay the
international price. This graduates into wholesale importation as the nation’s
refineries are either comatose or not working at optimum capacity; and
secondly, haphazard efforts of government to do Turn-Around-Maintenance of the
refineries are either sabotaged or handled inefficiently.
The consequence of this is
dependency on the importation of refined fuel from far flung countries. Those
who profit from this contrived process are members of the oil cabal, many of
whom were named by the House of Representatives Oil Subsidy Probe Report
(2009-2011). Players in the sector have established that the marketers’
mischief goes to the extent of financial claims projection even before arrival
of products.
The cabal appears to be a
syndicate of intellectual, commercial, bureaucratic and technical actors that
revel in using ‘fuel subsidy’ as a rationalisation of the looting of public
treasury which costs are foisted on the suffering Nigerians. To resolve the
issue requires firm political will; but there must be primary, medium and long
terms measures to cure the body polity of this embarrassing scourge. At primary
level, local refiners operating the so-called illegal refineries, which are
destroyed daily by the military Joint Task Force in the Niger Delta should be collectivized
into cooperatives and regulated for standard and order.
They may well form the
foundation of an indigenous technology. On the medium term, licence for modular
refineries should be issued or those with licences to build refineries should
be encouraged to invest in modular refineries to cure the resort to importation
now that the refineries would likely gulp huge amounts for rehabilitation
before they can come to the rescue. The option of investing in a new plant
remains attractive. In the longer term, large capacity refineries should be
built by private investors to complement the one being built in the Lekki Free
Trade Zone expected to commence production in 2017. (guardian)
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