Since they will not listen
By
THE federal government last June lost to Nigerians its struggle to increase cost of petroleum products. Like a gallant general, President Olusegun Obasanjo conceded and even apologized to us on the issue. But today, he and his pro-IMF men have dug new trenches and are battle ready to take on Nigerians. His excuses are not convincing; he says for instance that we have to pay more for fuel because the products are being smuggled to other countries, so if we pay high prices, smuggling will not be attractive. This is the same ancient argument General Ibrahim Babangida made over fifteen years ago. So the inefficiency of governmental agencies are to be paid for by us. But let us leave the president and his Jerrinasing ministers alone and concentrate on the Report of Government’s Committee on Petroleum distribution and pricing which to the government is now its holy book.
The Report has two fundamental flaws; first is the assumption that oil is owned by government not the people, and that the citizenry must therefore pay internationally competitive prices for petroleum products.
The second assumption is that the refineries are not working and may never work, therefore, fuel prices must include cost of freight, demurrage and taxes payable at the spot market.
With these two fundamental flaws, faith that at the oil sector must be ‘de-regulated" and that we must pay high prices for fuel, the committee’s report was bound to be anti-people, and any government that seeks to implement it is bound to fail. To me, the outcome of the committee’s work is not surprising because it is mainly composed of people who either do not pay for fuel or can afford to buy a litre at two hundred naira per litre; there is no way they can feel or understand the peoples needs and what they can afford.
To give credit, the committee exposes the open secret that there is no subsidy in the N22 per litre we pay today. It’s Table 12 published on page 49 shows that in the N22, we pay N1.50 for refining and another N1.50 as capital cost recovery for the refineries and another 45 kobo for capital on pipelines. Also in the N22 we pay N1 to the NNPC for insurance and medical while government takes from us N3.10 as tax for every litre we purchase and N2 as government surcharge.
Although government talks glibly about need for more money to the marketers and for maintenance of refineries and pipelines, when it got N2 more for every litre last June, it gave nothing out of it to either marketers or the refineries, rather, it took the entire money and spent it!
The fact is that if the refineries run at 60 per cent capacity and government is not greedy, Nigerians would need not pay as high as N22 per litre and we shall have surplus petrol to export. It should alarm any right thinking person that just ten years ago we were paying 60 kobo per litre for petrol., today it is N22 yet the government thinks we must pay more! The Obasanjo government was voted into power not to colonize the people or further burden them but to lighten their yoke, now it behaves like the tax masters of old.
The committee acknowledges that for every litre we buy, we are paying N1.50 as transportation allowance and bridging cost to ensure that petrol is sold at uniform price across the country. So why are people not being arrested and charged with economic sabotage for selling fuel above N22 per litre.
The committee did not concern itself with this, rather it dealt with the issue that apart from a few cities "... prices in other cities range from N30 to N70 per litre depending on proximity to the sea" This claim is quite false; while it is true that the man in Maiduguri which is very far from the sea is paying higher than the official price, but so does the man in Bayelsa State who lives in the sea and produces oil in large quantities. So "proximity to the sea" is not the issue. What is at the heart of the matter is that we have had and still have governments that are incapable of protecting our interests, of checking sabotage and the exploitation of the people.
The committee also dabbled into the myth of appropriate pricing. In this, it tried to build into the price of petrol. the official leakages, inbuilt corruption, governmental inefficiency, smuggling and sabotage. The "appropriate pricing" bogey is not an honest one as we already pay higher than the price that is appropriate for fuel. What is clear to me is that we are being pushed along the same line as IMF pushed us in 1985 on our currency when it spun the myth about appropriate value. They told us that our naira was over valued, there was therefore the need to let it float and find its appropriate level. Then the naira was about N3, today it is N112, rather than float, the naira was drowned and the official and unofficial parallel markets, like other parallels, never met.
The committee spun another yarn; oil marketers are unhappy because the market is not profitable and there are low returns. The impression it gives is that marketers are operating at a loss, my reaction is that this is not reflected in their balance sheets, what those show is that marketers are in a very profitable business. Secondly, if fuel supply and distribution are unprofitable, why are fuel stations springing up so fast that residential houses are giving way to them in the urban centres.
Inspite of spending months and a lot of money, the committee could not ascertain how much fuel we consume daily in the country. It’s guess based on "experts" testimony is that we consume between 150,000 to 300,000 barrels of crude oil daily.
With a refining capacity of 450,000, it means that if we have a competent government that gets the refineries working we only do not have any business with scarcity, but we should be in the business of exporting refined petrol.
Based on the committee’s recommendations, a massive government propaganda has begun with consultants and officials of Jerry Gana’s Ministry of Iinformation and Integration smiling to the bank. I hear it is a N150 million project. I’m sure with that, the MAMSERISING Gana would have no problem Jerrinazing for Obasanjo. But can the minister stop personalizing this issue?
His being a "Born Again" Christian who tells no "lies" has nothing to do with the fact that Nigerians are not ready to pay a kobo higher for fuel.