IN SUPPORT OF DEREGULATION

IN SUPPORT OF DEREGULATION: STIRRING THE HORNET'S NEST!

For any Nigerian leaving at home to support deregulation and canvass the view openly is to call a spade a spade, to take the bull by the horns and damn the consequences, especially when such views are coming from an academic, whose parent union, the Academic Staff Union of Universities (ASUU) is brazenly opposed to it. To oppose deregulation in Nigeria is to ride on the wave of popularity. To support it is to be sidelined by organized labor and be labeled "a government man". This is particularly so, when one considers that one has been against deregulation in the past in an article on Nigerianworld.com titled, "Deregulating Poverty Alleviation: Obasanjo's Quagmire". That was an article that was written in Diaspora, precisely at the Center for Energy, Petroleum & Mineral Law & Policy, University of Dundee, Scotland, UK.

At the time, one was at pains at reconciling the decision to deregulate with the possible consequences of an increase in the pump prince of petrol and its predictable impact on the general prices of goods and services, how this was going to affect the poor, who are in the majority and then, juxtaposed with the Obasanjo government's poverty alleviation program. It was an irony one could not reconcile. I thought it amounted to no more than taking with the right hand what the left hand had already given. Now that, one is back to Nigeria and having had a first hand experience of what the situation is like, one is convinced more than ever and beyond the shadow of doubt that, on the balance and, in the long run, it would be in the interest of the country and its citizens to deregulate the downstream petroleum sector. By 'downstream sector' is meant that sector, which deals with refining and marketing of petroleum products. This is one decision this government would have been right about but, which for a lack of political will and vision, it is prevaricating and inevitably prolonging the sufferings of the Nigerian masses. Sadly, when you would expect the government to be far more sensitive in the areas of education, ethnic minorities and religion, it displays a regular acumen for cutting its nose to spite its face.

Deregulation is not synonymous with increase in prices, even though that may be one of its short-term consequences. Deregulation, strictly speaking, means the removal of regulation. In economic parlance, it is somewhat synonymous with decontrol or de-monopolisation. In the downstream petroleum industry, it would mean reduced governmental interference with refining and marketing of petroleum products and how the industry is run. Surely, government would remove current subsidy on petroleum products. But, there would be more entrants into the sector. Our over bloated and inefficient Nigerian National Petroleum Corporation (NNPC) together with its subsidiaries would cease to have a monopoly of the downstream sector. Imagine that, it was the NNPC drilling for crude oil and gas in Nigeria and that, there was no Shell, Agip, Elf, Chevron, Mobil and the rest of them. How efficient would we have been? And yet, what you have in the upstream sector is more or less this analogy. With more players in the industry, there would be more rational and efficient allocation of resources in the short-term. The long term effect is to stabilize prices with increased and improved variety of the quality and quantity of petroleum products in circulation for the ultimate consumer.

Furthermore, it would make our petroleum prices far more competitive both locally and internationally. There would be better value for money. Smuggling would be discouraged as those, who have perfected the business of smuggling our scarce products for financial gains would not find it any more economically gainful. Government needs not spend extra moneys policing the country's borders, or sleeping with one eye open.

And what is more? Deregulation of petroleum products would most certainly reduce the man-hours lost in queuing for fuel, diesel and kerosene at our filling stations all over the country. Those who are abroad may find it difficult to understand this. An average working class Nigerian, who intends to do the right thing by buying directly from the filling stations instead of the black market spends not less than three to five hours queuing for fuel. The queues are so long sometimes that you are scared. For how long would this continue? It is even getting worse by the day. The Guardian reported today that drivers in Lagos have gone on strike because of the fuel scarcity situation and that, this has led to the crippling of economic activities in the Lagos metropolis. It is indeed a very sad commentary on us a nation that, a country so blessed with petroleum resources is unable to manage it in a sustainable manner for the benefit of even its present generation.

It is now common practice to see children and youths, who should otherwise be in school or elsewhere either trading in some commodities (not that I prefer this) or usefully engaged to hawk petrol in plastic containers and bottles by the road side. In the Eastern States of Abia, Imo and the South South States of Rivers and Bayelsa this unhealthy and unsafe practice has become alarming. You hear of Petroleum Prices Monitoring Committees and the rest, yet these youths hawk these products in broad day-light and brazenly. We all know those who have been burnt to ashes from scooping petrol along pipelines. The potential fire disasters on our streets can only be better imagined all because, these children and youths find it economically beneficial to scoop, or buy fuel and resell at black market rates.

One of my initial arguments against deregulation was the fear that transporters were going to hike their fares. Admittedly, this is still a real possibility. But, it would not be because of deregulation. In Port-Harcourt, where I ordinarily reside, for instance, well over half of the bus and taxi drivers buy their petrol from the black market, which prices are already very high indeed. Yet there is no serious difference in the fares they charge. They only increase their prices when they can hardly get even the black market fuel to buy. If transporters increase their fares because the government has deregulated, it is only because of greed and bad faith. What the government could do is to dialogue with the transporters, reduce or remove import duties on vehicle spare parts as well as the taxes and charges along our highways and motor parks.

Honestly, any one who has been in Nigeria since the beginning of this year would readily agree that everything is inexorably grinding to a halt because of government's inability to manage the downstream industry sustain ably. Any responsible government ought to have known ten years ago that, we would definitely need more refineries even if the existing ones were operating at full capacity. Unfortunately, there has hardly been a time in the past ten years, when all refineries in Warri, Kaduna and Port-Harcourt operated at optimum capacity. But, the increase in demands and services coupled with our epileptic power supply (by the way, which is in a most sorry state right now) have meant that more and more Nigerians would require petrol, diesel or kerosene to compliment intermittent and sporadic electricity supply at their homes and offices. In a country, where there are no dependable sources of statistical analysis, how can government know that far more fuel is now being used in our homes and offices than in our cars?

All those opposed to the removal of subsidy on petroleum products, including the Nigerian Labor Congress (NLC) and ASUU do not deny that much more moneys would be released to government to invest in social services, which are almost non-existent now. What they fear and, rightly in my view is that, if our experience about governance in Nigeria is any to go by, how could any one trust our politicians to truly invest these funds in social services especially in housing, health and most importantly, education? At all times, we were convinced into thinking these were what the previous governments were going to do about incremental removal of subsidies and, at all times, they have consistently failed us. How are we to trust them this time around? Supposedly, this is one of the reasons why ASUU is kicking against the World Bank loan for the improvement of higher education in Nigeria. As sympathetic as I am to the NLC and ASUU positions, I disagree with them on the two fronts. However, in relation to the latter, I reserve my comments for another article.

For there to be any meaningful progress in our country, we all must have a minimum degree of confidence in our governments at all levels. For the avoidance of doubt, I am not a 'government man' in the Nigerian sense. I have never been in government either, nor am I aspiring, right now, to be in government. I am not also member of any political party but, I believe, we must support and encourage our government to succeed. Democracy has afforded us the opportunity to view government policies with magnifying glasses, to express our reservations, or support. Despite our economic and social delinquency as a nation, we still have one of the most vibrant Press in the world, who would stop at nothing in unearthing the worms, skeletons, and scams in our body polity. I would loose no sleep in realizing that our corrupt politicians are in possession of so much moneys, which they have saved from the removal of petroleum subsidy but, which is to be used for improving social services - housing, health and, most importantly, education.

The writer is of the Faculty of Law, Rivers State University of Science & Technology, Port-Harcourt, NIGERIA