The New Year beckons, promising to be one with different hues.
Nigerians, who have been through all sort of things, are optimistic about a change in their fortune. They are deservedly expecting a turnaround to their lives, believing a new leadership would bring the magic wand at the centre.
Then, they would wish the past eight years never was.
But has anyone contemplated that such a wish might be a pipe dream after all, in the face of the looming removal of subsidy on fuel.
Those who are knowledgeable about the oil industry are emphatic that once the Federal Government hands off from the fuel subsidy, the commodity might be selling for three times more. They leave Nigerians with the simple arithmetic of how that will impact the prices of food, goods and services – and above all – standard of living. And in case you need an expo, they urge you to use the current market prices to forecast what will happen when the official high price of fuel takes off.
Over the months, the Muhammadu Buhari administration has been grumbling that the current subsidy regime it once denied never existed, was killing the economy.
The real amount said to be involved in the debacle till now, remains in the realm of conjecture. However, it is believed to be in trillions of naira annually.
A formidable ring is said to be in control of the big racket involving a “cabal” in the government, oil industry and other circles. Each year, the cabal members simply funnel off tons of cash from the vaults of the government with so much glee.
As it stands, even President Buhari is unsure of what to do with the cabal; he cannot offend the members. So, he shifted the planned subsidy removal date to June 2023 after he had taken a walk away from Aso Rock, thereby pushing the task to the incoming administration to tackle.
At the moment, some candidates campaigning to be president in 2023 are promising that they would take the challenge headlong. Subsidy on fuel must go; it is a huge racket, they too claim.
But the question now is: when the subsidy – which some people on the streets believe is all they benefit from government – is gone, where does that leave the citizenry?
Now, stakeholders are talking about the vexing matter. And that will not go away even in a long time to come.
Subsidy cesspit of corruption
Among those who believe that the subsidy regime is one big cesspit of corruption is former iconic NUPENG Secretary General, Mr Frank Kokori. And it sounds he knows better.
“When you mention subsidy,” he says, “I will tell you that Nigerians have abused it for so many years. It is because of that, that Nigeria is now almost bankrupt. It is no longer a thing that the country can uphold any longer, unlike in my time.
“These days, Nigeria has changed.
“In 1994 when I left for prison, the pump price of fuel was N2:50k. Two months while I was in prison, it went up to N11, almost 300 per cent.
“In my days in the oil industry, before the government increased the pump price, it always conferred with NUPENG because they knew our stand. But in 1998, they moved it to N30.
“Sadly now in Warri and its environs, fuel sells between N230 and N250. It is that bad; so you can imagine how much people in the East and the North will be buying fuel. Even in Abuja, I learnt that fuel is being sold at N300.
“So, I know that they will one day remove subsidy on fuel.
“But what we are saying is: let there be transparency in doing that. The removal will affect the common man. They have started felling it right from now because fuel is being sold at N240 – N300. So what is the big deal if the subsidy is removed and the pump price increased? That will be okay as long as we manage our resources correctly.”
Then he talked about place of corruption in all of the exercise. “Unfortunately, the bane of this country is corruption. I have always cried out against that. But now, there is no control. People are corrupt, and nothing happens to them. Sadly, that will continue to be until when God brings someone who will fight corruption properly instead of pretending to be doing so.”
Now, on enjoying life in retirement, Kokori is sad, saying “Nigeria is made up of many crooks.”
He is unhappy that “the marketers, tank farms owners, people in the government and the NNPC are all involved in the shoddy subsidy racket.
“When you hoard fuel, the price will go up. So, that is their plan, not that the government is doing it.
“People like Buhari might not know what is going on. It is the middlemen and our own compatriots who are billionaires that are manipulating things.”
Then he dropped the bombshell: “If you talk about subsidy on fuel, two-third of the money goes into the pockets of private Nigerians. Who does not know that? We all know that. But some of us are now too old to fight them.
“Those who can fight are the people in the civil society led by labour.”
But he said regretted that “today, Labour does not have that bite. And the civil society has been commercialised, including the media. The media are a critical actor in the civil society. Labour is the father of the civil society. But the two, who are the watch dog are now very comfortable.”
Subsidy removal sacrosanct
Mr Mike Osatuyi, national operations controller, Independent Petroleum Marketers Association of Nigeria (IPMAN), believes that the removal of subsidy on fuel is settled.
Hear him: “We have heard it from President Muhammadu Buhari when he said that would be done in June 2023.
Even Asiwaju Bola Ahmed Tinubu and some other presidential candidates have said they would remove subsidy on petroleum products if they win. So, that is now sacrosanct.”
Benefit of subsidy removal
Bringing Nigerians to speed, Mr Osatuyi, chronicled the benefit of the planned subsidy removal.
According to him, “when that is done, it will bring competition to the industry; it will bring fair play; it will remove bottlenecks; it will remove corruption. It will open up the system to those who are qualified to import. It will also help Nigerians to know the marketers, the players, and everybody in the game.
“And there won’t be any exploitation because there will be competition among the players. Principally, it will remove smuggling, and bring more money into the government purse.
“It is going to increase the pump price maybe by four times. It will increase the cost of goods and services.
“The money the government is going to gain from this will be in the region of N7 to N8 trillion per annum. If channeled towards transportation, electricity and good roads, that will bring succour to the people.
“But at the same time, if the government is able to mitigate the challenges, the masses will not feel much of the negative impact. That is the minus of it. But we have to start from somewhere, because we cannot continue like this.”
What fuel will then cost
For now, the official price of fuel per litre is N165. But depending on the location and availability, fuel now sells between N200 and N350 per litre.
But Mr Osatuyi says it might cost much higher when the subsidy is gone.
The expected price, he said, would depend largely on the exchange rate of the naira.
He said: “If the foreign exchange window is at N455 per dollar, then we should be looking at selling fuel between N500-N550 per litre, given that the price of crude remains the same in the international market.
“But if the importers are buying dollar at N800 to import petrol, then we should be looking at N700 per litre or a little less.”
Likely impact of subsidy removal
After the subsidy on fuel has been removed, things might turn differently for the majority of Nigerians. This is the candid belief of Kokori.
“Definitely things will never be the same again after the subsidy is gone. The impact of this will be economic difficulty – serious economic hardship. That is a part of the challenge we have been having over the past three years. Just that!
“Things might be much worse than we have them now. By the time the so-called subsidy is removed, Nigerians are going to be buying fuel at a much higher price. That will be officially stamped. But it is not so yet.”
Similarly, a lawyer with expertise in oil and gas matters, Ayodele Oni of Broomfield Law Practice, believes that the proposed plan will come with a lot of implications. According to him, “the backlash may be terrible depending on what Labour does.”
Here are his fears: “In term of pricing, things are going to be expensive; generally the prices of things are going to increase when they remove the subsidy, especially when certain things are not in place yet. But the effects will not be as bad if the government does the needful.
“Generally, the cost of production will go up; the cost of living will go up especially if they don’t fix the refineries and we don’t have alternative transportation other than using vehicles.
“If they remove the subsidy when those factors are not there, it is going to be unfair.
“The government needs to be mindful that the people are already in penury; people are already in pains – things are going to get worse. Cost of living, consumer items and their prices are going to go haywire.
“Needless to say things are going to be gloomy. And if we are not careful, the cost of living is going to increase. Cost of doing business is going to increase, consumer price index is going to increase; we might have pockets of protests here and there. Government might try to suppress the protest depending on who is going to be in government, but it is not going to be funny.”
First thing before removal
Oni offerred insight into what ought to be done first before lifting the subsidy.
“Subsidy on fuel can be good and bad,” he said, adding, “but first, the challenge with it is that it is usually linked with a system that is susceptible to corruption. Where you don’t have strong border protection, people are likely going to sell the fuel in the neighbouring countries where the price is higher.
“However, to remove subsidy, a few issues are critical. One, if you improve on grid electricity, it is always much cheaper than using diesel or fuel. Sadly, the people are now tied to using fuel.
But if you ensure that people have alternative means of transportation – like the partly ready Blue Rail in Lagos – imagine having that in many states, people will no longer have to buy fuel every day. They can park their cars at some places and take water transport or the rail transport. So you reduce the volume of fuel people buy every day. At the end of the day, they will spend less.
“Now, if the refineries are working, the price of fuel might go up, but the increase will not be as high as importing finished product.
“If you buy imported product, there are seven other items you pay for – ship-to-ship, insurance, freight and other charges for bringing in the finished product.
“But the prices of fuel will be cheaper if the refineries – like the proposed Dangote refinery – are running.
“If we ensure that electricity is working so that the people do not need to buy fuel every day to power their generators, if there is grid power, you would have cut off everybody buying fuel. Most people won’t be buying fuel if they have 24 hours of electricity. For example, the most expensive grid power you will get in Nigeria might not be more than N90 per kilowatt hour. Now, imagine diesel at N700 per litre?
“If they can do all that, the price of fuel will go up quite alright, but the individual will buy less quantity of fuel, perhaps less than 10 per cent at the new price – because you don’t use your car every day, and you don’t need to run you generator because you need power. At the end of the day, things will balance themselves out. The prices will be high, but not as high as when you are importing fuel or if when you have your own refineries. These are the things that need to be in place before you remove subsidy on fuel.”
Kokori on his part recalled that as bad as the military was, they managed to keep the refineries working.
“Truth is that now we don’t have any refineries.
“When I was at NUPENG, the refineries were producing at 90 per cent. Four of them – Kaduna, Warri and two even in Port Harcourt – were working. But now, those refineries are empty. Port Harcourt refinery was then producing the best kerosene in the whole world.
“But now, the government has neglected everything and the civil society is not doing anything about it,” he lamented.
Overall fate of common man
Kokori’s thoughts are that with subsidy gone, the suffering Nigerians might be headed for the Stone Age.
“The whole world is facing hardship. It is not Nigeria’s lone challenge.
“But the hardship in Africa is by far more severe than what they have in Europe and the Americas and even in the Asian Tigers.
“Here, our own type of hardship is different because we don’t have social security. Here, you pay your rent – for everything – we don’t have power – we don’t have anything.
“So we will go back to the primitive times; that‘s it. Some people will now be living like chicks.”
What can be done after subsidy removal
Kokori advised that should the government have its way, Nigerians “should now rise and check their government; they should be more committed to issues of transparency.”
Going down memory lane, he recalled his long walk with the military in those days now past.
“As a young man, at the age of 30 plus, I was already checkmating the government. I was trained for that.
“I trained as a freedom fighter, so I know what is to fight for freedom and democracy, justice and equity. I know what is to be committed to that. Indeed, I fought for democracy.
“To fight for freedom, you must be a bit comfortable; you must have your logistics. Then, NUPENG gave me all that. I didn’t want to be a billionaire; and I didn’t take bribe from people. When you take bribe from people and from your management, how can you fight for freedom? You can’t!
“Today, Nigerians are not committed.
They want to eat first.
“Nigerians are not prepared to make sacrifices; and they don’t love their country. Those of them who love their country are frustrated out. Some died unsung.
“In our days, we were committed. We were not taking bribe. People were ready to give us millions in dollars. But I went underground. Then I was in my late 40s.
“At 49, I was sent on solitary confinement at Bama prison in Borno State. I was there for four years. But I did not regret that!”
Advice for incoming president
With the look of things, Oni believes “whoever that is coming in now as president is going to be between the rock and a hard place.”
Since there are indications that things will go South with the planned removal of subsidy, he counseled that whoever becomes president should “consider a phased removal of the subsidy and then see if he can set key milestones such as increase in available grid power, alternative transportation means and refineries.”
He believes that “when Dangote starts to refine oil, the new administration can then remove 20 per cent of the subsidy.
As power increases, he can come up with additional ones. When we have water and rail transport, he can remove the rest. There has to be a clear phased removal,” while calling for public enlightenment on what the government plans to do.
Nigerians express concerns
Meanwhile, some Nigerians who spoke to Sunday Sun, have voiced out their concerns about the impending subsidy removal.
In his reaction, Vincent Okeke, a resident of Lagos said: “Now that we are buying fuel at N200, N250 and things are as difficult as this, one can imagine what will happen when the pump price goes up as high as N500. That means tremendous hardship for the people.
What is our offence? What did we do to deserve all of this from those who claim to be our leaders?”
Expressing his sadness over what might happen next year, Musa Garba, a commercial motorcycle rider in Isheri-Oshun, Lagos, feared that “things might take a terrible turn for the worse.
Even when we are suffering like this, imagine what will happen when the subsidy goes off. We might not be able to see passengers to patronise us.
Things will be expensive; some of us might not even be able to eat twice daily.”
A transport operator, Onyebuchi Korie, reasoned that next year, “a bus ticket from Lagos to Owerri might go up as high as N30,000.”
He is unhappy that people in government are only there for themselves, while questioning “what the government is for if not to minister to the need of the people.”
He queried: “Why is this quantum of pain being inflicted on the people in a land where there is plenty?”
Similarly, a petty trader in Lagos, Akin Oluwole, expressed anger that anyone was still contemplating fuel subsidy removal after President Buhari had shelved the idea.
“Removing it will be the worst of injustice to the long-suffering people of this country.
“What that means is that, they will further place a bigger burden on all of us.
“Look at the prices of goods in the market right now. Everything is getting out of the reach of the common man. It is sad. Indeed, this country makes her citizens sad. I can’t believe anything less,” he lamented.
SOURCE : TheSunNigeria
