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Sunday, July 21, 2024

How President Tinubu Has Saved Nigeria From Oil Curse


“The overwhelming presence of oil did act, indirectly, to deform the economy and national life. Privileged sectors of the population began to acquire the mining mentality of newly rich spendthrifts. The uninterrupted flow of dollars encouraged imports and expanded commerce to such a degree that the nation became primarily a consumer of foreign products. We began to appear too much like that chaotic California—the paradise of adventurers and thieves—during the days of the gold rush.’’

Does the above quote by Romulo Betancourt, Former President of Venezuela, 1945-1948, 1959-1964, not appear familiar as if it is addressing the present situation in Nigeria?

It is amazing how the comment made by former president, Betancourt, on the state of affairs in his country, Venezuela, which has become the poster child of oil curse -a euphemism for what could go wrong in an oil-rich country nearly sixty (60) years ago resonates with the current situation in our country.

By all indications, readers would agree that the experience of that South American neighbour of the United States of America, USA, fits easily with the current lamentations about the tragedy of oil curse in Nigeria, which like Venezuela, is very rich in oil resources, but very poor as a result of the recklessness or warped policy direction of her past leaders, reflected by the mismanagement of the God-given natural resource-oil in that country.

But after being under the yoke of oil curse since oil was first discovered in Oloibiri in present day Bayelsa state, in 1956, President Bola Ahmed Tinubu via his pronouncement in his inaugural speech on 29 May, “petrol subsidy is gone”, appear to have come to the rescue of the long-suffering Nigerian masses, who instead of basking in the glory of oil wealth like Saudi Arabia, Qatar, United Arab Emirates, UAE and the Scandinavian countries such as Sweden, Norway, Denmark etc, one hundred and thirty-three million (133m) of the over two hundred million (200m) population have been enduring multi-dimensional poverty as recently confirmed by a study commissioned by the federal ministry of finance.

Before going further to acquaint readers with the atrocities committed against the people of Nigeria by the leaders who got the policy of petrol subsidy entrenched in our country, it is of utmost criticality that the hidden, but direct benefits of the petrol subsidy removal policy that has been given a bite by the new administration are highlighted.

That would enable readers to appreciate the petrol subsidy removal decision as a harbinger of good things to come in Nigeria if the current courage in leadership being exhibited by the incumbent president Tinubu’s administration is sustained.

To start with, has anyone noticed that the volume of diesel, kerosine and aviation fuel etc consumed in Nigeria has not risen since the sale and distribution has been privatised and it is being driven by the private sector?

The reality is that since subsidy on the aforementioned petroleum products has been removed in the past five (5) years, the current cost in Nigeria is comparable to the price in neighbouring countries. As such there has not been any incentive to smuggle those products across our borders, hence the volume of import has remained constant and unambiguous.

But that is not the case with the quantity of Premium Motor Spirit, PMS or petrol, which was still being subsidised up to 29 May and as such the volume has allegedly been growing exponentially from 33 million in 2015 to 66 million litres in 2023, with billions of dollars sunk in as subsidy under the guise of making it affordable to the masses.

And the petrol subsidy misadventure that degenerated into an economic nightmare

is a perfidy which some pundits aver must have gulped a minimum of fifteen billion ($15b) in the past decade and at least ten trillion naira (N10trn) in the past (2) years alone, until Asiwaju Bola Ahmed Tinubu took charge as president on 29 May.

That is simply because the price of petrol in Nigeria is said to quadruple the cost in our neighbouring countries owing to its being subsidised in our country, so it is susceptible to smuggling across our borders at a huge financial loss to our country.

In other words, it is the cheap cost of petrol in our country that had been creating the incentive for the product to be smuggled across our borders into Cameroon, Niger Republic, Benin Republic, Chad etc, until the price got equalised as an aftermath of the famous 29 May Inauguration Day presidential statement “petrol subsidy has ended”.

Apparently, while Nigeria has been subsidising PMS for the whole of West Africa at a very huge cost to our country, nobody is smuggling diesel, kerosine or aviation fuel that is not subsidised hence their prices are at par with what obtains in neighbouring countries.

The Nigerian situation before President Tinubu’s intervention via ending petrol subsidy on 29 May, echoes the Venezuelan experience.

Owing to the fact that the South American country is a practising socialist nation, she was offering cheap petrol to neighbouring countries in South America and the Caribbean with a similar socialist orientation.

That uneconomic approach to managing its natural resource endowment is the origin of its stagnation, if not the rot that it got mired in for a long time.

Due to the parlous state of the economy of that country despite being endowed with huge deposits of hydrocarbon it was branded as a country suffering from Oil Curse.

That is a similar road that Nigeria has been travelling since as far back as 1977 until President Tinubu put an end to it as soon as he mounted the throne in the leadership of our country on 29 May.

Although, it is just beginning to wean itself off that image by associating more with its neighbour, the United States of America, USA, which she has turned to for help by allowing her to optimally assist in monetising its oil resources.

And the US accepted to engage with Venezuela in the bid to reduce the price of petrol which was rising and creating political challenges for incumbent Joe Biden’s administration after being disappointed by Saudi Arabia which had failed to increase oil supply after the US President Biden paid a visit to the world leading oil resource Arabian country to plead for increase supply into the world market in order to reduce the pump price in the US prior to a very crucial mid-term election.

The narrative above indicates that oil is a very sensitive political issue that has high relevance in national, geopolitical and international environments.

Regarding the situation in Nigeria, it is owing to the high cost of petrol which stems from petrol subsidy removal that there are currently fewer vehicles on the roads.

And the absence of vehicles on the roads without them being replaced by mass transit platforms such as train and water transportation platforms can not be a good thing because it implies that the mobility of the masses has been impaired by the high cost of petrol.

That explains why there is so much anxiety in the polity.

It is a challenge that the new administration under the watch of President Tinubu must address and perhaps it may do so now that the National Assembly, NASS, has been inaugurated on 13/6/2023.

That means that critical appointees that would help steer the ship of state would as required by law be recommended to the Senate for approval.

Simply put, with NASS inaugurated, the full compliments of the government are now in place. So there would no longer be any excuse for the government not to take off at full steam with all cylinders firing, literally.

No matter the prism from which the current situation is viewed, it is clear that the withdrawal of subsidy on petrol has forced some hardships on the masses, which is actually not the intention of the government.

As such, the administration of President Tinubu has pledged to rise to the occasion.

As an option for preventing folks from developing a feeling of denial by the new administration that has enforced petrol subsidy removal which some Nigerians deem as their entitlement, President Tinubu can explore re-enacting a scheme that was practiced in the past in major cities aimed at decongesting the roads of the huge traffic that was clogging them in the heydays of oil boom when there was too much petrol dollar flowing into Nigeria reminiscent of the Dutch disease and Venezuelan curse hence there were more vehicles on the roads than could be decently accommodated.

The system that l am nostalgically recalling is the period that car polling, mass bussing, as well as alternating days that odd and even numbers of registered vehicles can ply the roads.

The motive then was to decongest the roads as the oil boom had translated into too many Nigerians being able to purchase and own cars that were clogging the roads, hence the authorities had to creatively find ways around the congestion.

While not advocating the resort to those policies in the present time, one is extolling the remarkable fact that when the nation was challenged, innovative solutions were sought and applied.

So, it is being envisaged that ideas merchants that abound on our shores are working assiduously in the laboratories to come up with viable solutions to the hardships that petrol subsidy removal is causing the masses.

Back in the day, the aforementioned buses conveyed workers from various strategic and far-flung locations, for instance, FESTAC and Satellite towns, which were the popular dwelling places of most civil servants to Tafawa Balewa Square smack in the middle of Lagos metropolis from where most workers proceeded to their respective places of work.

One time Lagos state governor, Alh. Lateef Jakande, of blessed memory, even took innovation a few notches higher by introducing water transportation when the state acquired and deployed ferries and Hoover crafts after constructing jetties in strategic locations where owing to the state being surrendered by water, transportation by water is quite ideal.

As most of us that are old enough to remember may recall, Jakande was in the process of setting up a monorail in Lagos before the democratic government of that time was terminated via a military coup at the end of 1983.

If that project had seen the light of day, perhaps other states could have emulated Lagos and the current traffic logjams in the cities would not have been existing in Lagos and other major cities.

Commendably, the Lagos state government, since 1983 and spanning three democratically elected governors has been trying to resuscitate the Pa Jakande monorail initiative, but with very minuscule success achieved by current Lagos state governor, Babajide Sanwo-Olu, largely due to paucity of funds.

Perhaps with President Tinubu unshackling the Nigerian business environment via policy reforms currently ongoing, Nigeria, which has had the toga of being a welfarist state would become more investment friendly, so that foreign investors could develop interest in staking their funds and expertise in providing mass transit infrastructure in Nigeria.

If for nothing else, investing in mass transportation in Nigeria is viable because the purchasing power exists, especially based on our huge population of over 200 million people.

And the funds that would not be sunk into petrol subsidy going forward can be applied to the provision of infrastructure as the government enters into Public Private Partnerships, PPP with willing investors.

Already, the Dangote refinery and petrochemicals company that was recently commissioned is a proof-of-concept of PPP of mega dimension in Nigeria.

In an opinion piece that l wrote celebrating the commissioning of the Dangote refinery last May, titled: “Petrol Subsidy Removal, Dangote Refinery As Best Kept Secret”, l suggested that the next major service required in our country that Dangote should set his eyes on is mass transit infrastructure such as the railway.

I also recommended that fellow billionaires like Chief Mike Adenuga of CornOil, GLO, and Mr Femi Otedola, former owner of Forte Oil and now founder of Geregu Power, Alh.Abdulsamad Rabiu of BUA group, as well as Tony Elumelu of HEIRS holdings, who are entrepreneurs that have been actively involved in investing in infrastructure in Nigeria, should set their eyes on investing in the gas sector which is an asset that is wasting as it is by law being flared by the oil prospecting companies since it is being deemed as a by-product in crude oil production.

With the investment climate in Nigeria becoming more liberalised through the two policy decisions made within a spate of two (2) weeks of ascension to the number one position in Aso Rock Villa by President Tinubu( removal of subsidy on petrol and naira, as well as freeing up the electricity production sector for private sector participation via Electricity Act 2023), it would not be too difficult to secure the interest of foreign investors to partner with Nigerian investors in harnessing our wasting natural gas asset.

Especially now that the Russian gas supply is tight and an alternative source is badly needed in Europe.

Returning to how to succour can be rendered to Nigerian masses who are bearing the hardships arising from petrol subsidy removal, one is not unaware that it is not all states that are financially viable to lay out the robust transport and logistics infrastructure that has been introduced in Lagos state as earlier referenced.

That is because most states would ill afford or would struggle to provide a similar robust transport bulwark required owing to the lack of the financial muscle required.

In any case, the number of people in the financially challenged states that need mass transit is actually nothing compared to Lagos state’s population estimated to be 15 million while the other states are only between 3-7 million people.

So, as a fallback, the not-so-buoyant states can work towards providing such platforms with the support of the federal government which would be drawing from the poll of funds that would have been sunk into the petrol subsidy scheme.

Another concept that helped to ease the burden of transportation and logistics back in the day was the resort to odd and even number of days for vehicles to be on the streets of major cities in the country.

Although the odd and even number of vehicles on special days for plying the roads encouraged reduced vehicular traffic on the roads, it also resulted in the ownership of more than one car.

My point is that the incumbent government should similarly engage in out-of-the-box thinking to triumph over the challenges thrown up by the withdrawal of the petrol subsidy.

Again, in Lagos state, Wale Tinubu’s Oando is already on the verge of rolling out Compressed Natural Gas, CNG-powered buses for mass transit. That is evidence of private sector involvement. Therefore, there is no reason other major entrepreneurs around the country should not replicate similar initiatives in their respective zones and states.

But for the above-listed schemes to be successful, the government must first make funding available through loans on the platforms of microfinance banks that have done well in on-lending to small and medium-scale entrepreneurs which is quite distinct from the discredited Trader Moni and similar gambits applied by the immediate past administration.

With car loans that would enable more Nigerians own cars put in place, indigenous automakers such as lnnosson Motors and other automobile assembly plants could boost the number of cars coming out of their production lines, which means more jobs for Nigerians, improved Gross National Product, GNP and Gross Domestic Product, GDP, which would be good for the economy and the country as a whole.

One is not unaware of the mess which the Nigerian Maritime and Shipping Authority, NIMASA and Nigerian Ports Authority, NPA, made of the cabotage loans aimed at promoting ship ownership by Nigerians. There have also been issues with the empowerment of entrepreneurs in the manufacturing sector at single-digit interest rates loans from the Bank of Industry, BoI.

So,l expect that in establishing the new paradigm for mass transit entrepreneurs, care would be taken to eliminate the factors that hindered similar gestures of government in the maritime and manufacturing sectors such that it would be easy for the established transport and logistics firms to access loans to acquire and deploy CNG powered buses to ameliorate the hardships being encountered by commuters arising from the higher cost of petrol.

Obviously, my proposition is not for Nigerians to borrow funds hook-line-and-sinker, but the advocacy is for us to borrow responsibly for production activities, which usually have catalytic effects on the economy and by extension, the nation as a whole.

In the meantime, I do not align with Chief Executive Officer/CEO of NNPC Ltd, Malam Melee Kyari’s postulation that following petrol subsidy withdrawal, he expects the volume of PMS used on a daily basis by motorists to be reduced by 30%.

That is because, in my estimation, it would drop by as much as a minimum of 50%.

And the reason for the anticipated drastic reduction is attributable to two (2) factors: (a) the end of the smuggling of petrol out of Nigeria and (b) a crash in the number of people driving cars in Nigeria.

While the latter is already evidenced by the dramatic disappearance of queues in petrol stations after the announcement of the dramatic price hike that tripled the cost by NNPCL which is the monopolist in petrol importation, the former is validated by the threat of motorists in our neighbouring countries- Cameroon, Benin Republic, Niger Republic etc that cost of transportation to commuters would go up in their country since they no longer have access to cheap petrol smuggled out of Nigeria.

The excuse for making NNPCL the sole importer of petrol in 2017 or thereabouts was due to the unfortunate incidents of petrol importers and marketers getting involved in all manners of sharp practices ranging from the importation of adulterated petrol and falsification of import documents to claim subsidy whereas the products never got shipped to Nigeria, how much more arrive Nigeria.

But has the decision to make NNPC a monopolist paid off well for our country?

l would say: not at all.

The underpinning reason for my thumping down NNPC monopoly is because the importation of adulterated petrol still goes on unabated.

ln fact, l was a victim when l recently filled up the tank of my car at admiralty road, Lekki Lagos station of former Forte Oil, currently branded Ardova.

As l was driving by the station, there was a petrol tanker discharging its products into the storage tank of the petrol station.

So, l stopped by to make a purchase.

After filling up my tank, my car barely managed to drive across the Lekki bridge into Ikoyi on my way home because of the adulterated fuel which almost wrecked the engine of my car.

To cut the story short, by the time the foul fuel was discharged from the tank of my car, it had practically damaged my fuel pump because it contained more water than spirit.

Going by the narrative above, if the reason for granting NNPCL monopoly right to be the sole importer of petrol into Nigeria was to prevent adulterated petrol from finding its way into our shores, the unfortunate incident with the purchase that l made is glaring evidence that ending the system of democracy in the business of importing PMS and replacing it with the autocracy of NNPC as sole importer failed to achieve its objective by not sanitising the system.

So, rather than solve the problem, NNPCL tyranny was foisted on motorists as the petroleum behemoth has had a choke hold also known as a monopoly.

By the way, the National Assembly, NASS and Revenue Mobilisation And Fiscal Commission, RMFC are already questioning the opacity and sole power to generate and spend oil money resulting in NNPCL not remitting funds from the sale of crude oil into the federation account and instead slamming the federal government of N2.8 trillion unsettled payment for petrol subsidy that it claims to have applied on its behalf although subsidy was discontinued in May instead of the end of June as provided in the Petroleum Industry Act, PIA.

Based on my sordid experience of being a victim of adulterated petrol purchase and l guess that of many other Nigerians that have been victims of also being sold ‘bad fuel’, weeding out other importers has been proven to be a futile effort, simply because it did not solve the problem of petrol adulteration.

Instead, it came with its attendant negative effect on the economy, particularly a lack of transparency in the process of importing and distributing PMS.

And it has been revealed that the reason Nigerians did not know for a fact the volume of petrol used by motorists in Nigeria is that rather than measure the quantity distributed to the numerous petrol stations across Nigeria by recording the volume and actual retail stations dispensing PMS to motorists, it is the number of trucks that are loaded from the depots that are recorded without capturing where the products were discharged.

As such the quantity allocated to the various petrol stations across the country: region by region, state by state, city to city and dealer to dealer has remained opaque and unknown. Such lack of transparency suggests that NNPCL is complicit in the obfuscation of the actual volume of petrol imported into Nigeria.

And it clearly indicates that somebody somewhere is taking Nigerians for a ride.

It is believed that somebody somewhere may be located within NNPCL which has since 2017 been determining how much is applied in petrol subsidy from the sales of our crude oil.

The Ministry of Finance, Customs Services, as well as the Nigerian Navy and other relevant security agencies must also be involved in the petrol conundrum.

For the petrol subsidy removal initiative to yield the much-sought benefits, it is about time the Augean stable is cleaned up.

And it is expected that President Tinubu would not tarry in that respect.

The nebulous process that allows NNPCL to exclusively sell our crude oil and purchase refined petrol for the nation with the proceeds hoping that the income from the sales of crude would surpass the cost of importing refined products is, to say the least, inefficient and vulnerable to manipulation because it makes NNPCL the sole administrator of our oil resource.

Based on what the CEO of NNPCL, Mallam Kyari, has told Nigerians, the federal government owes NNPC N2.8 trillion naira after netting off the amount that it applied in importing petrol on its behalf.

With NNPC collecting and spending Nigeria’s oil revenue, God knows the dimension of graft that is probably being perpetrated in the behemoth to the detriment of the masses

That is why it is quite welcoming that the National Assembly, NASS Revenue Mobilisation and Fiscal Commission, RMFC have called for a probe into how the sale of crude oil and purchase of petrol exclusively by NNPCL has been carried out since the Ministry of Finance and CBN got taken out of the equation with the NNPCL being a sort exclusive manager of our nation’s oil/gas assets and revenue.

Amongst other benefits, what the recent petrol subsidy removal has engendered is that the exclusive importation of petrol by NNPC is about to be over.

And that is especially with the Dangote refinery coming on stream and hopefully in the coming months, (maybe years) when the four (4) government-owned ones in Port Harcourt, Warri and Kaduna with a combined capacity of 450,000 barrels currently undergoing Turn Around Maintenance (TAM) come on stream.

When and if that happens, Nigeria may have the capacity to produce up to 1.1m barrels of petroleum products daily.

With the barriers lifted, there is also likely to be an influx, if not an avalanche of investors into the petrol refining business as the business becomes more attractive for investors.

In that regard,l suspect that the plethora of businessmen/women granted licences for modular refineries in the past decade and who have been unable to roll out the refineries due to the government subsidy on petrol that distorted pricing would be motivated to venture into the business.

As a result employment opportunities for our youths in the Niger Delta would be boosted and at the same time, with increased production activities, the Gross Domestic Product, GDP of the oil/gas-producing regions would also be boosted.

Currently, only a few modular refineries have been activated in the past half a decade or so. They are Walter Smith Refinery in the lmo State, Niger Delta Refinery in Rivers State and Edo Refinery in Edo State producing between one to five (1-5) thousand litres of petroleum products a day. There are several other modular refineries in the pipeline that would soon start going on stream as the pricing has become reflective of market forces.

When the modular refineries in various stages of completion come on stream in the nearest future, our country may be able to introduce another 100,000 litres of petroleum products into the market through the combined efforts of multiple refineries in the next 24 months because it takes a minimum of 18 months to set up a modular refinery.

Of course, all these are theoretical projections and may not become a reality as it is very unlikely that the refurbished refineries would be able to produce to their optimum capacity.

Given the huge opportunity that the involvement of entrepreneurs of medium scale category, particularly investors in modular refineries would open up, one wonders why it took so long for Nigeria to cross the Rubicon into a nirvana of sorts which is a situation whereby we would be producing what we consume with excess left over to export.

As the suspended (currently detained in the custody of security agency) CBN governor, Mr Godwin Emefiele, recently revealed, our country spends about $26 billion importing petroleum products and fertiliser.

That is a massive haemorrhage for our treasury and the leakage would be plugged by the announcement of subsidy removal by President Tinubu.

Imagine if our leaders had concentrated all our energy and resources into refining our crude oil that at some point in time had hit over two (2) million barrels a day mark?

Instead of the estimated ten billion dollars ($10b) that experts believe we earn from crude oil export annually, we would be earning at least one hundred billion dollars($100b) annually based on the belief that refined petrol products attract up to ten (10) times more than the price of crude oil in the international market.

It sounds and appears far-fetched and theoretical, right? But it is a realistic and practical projection based on available facts.

In fact, had our country’s leaders done the needful as the Millennials often like to put it, and as President Tinubu just did by ending petrol subsidy, our NNPCL could have been like Saudi Arabia’s Aramco that refines some of that country’s crude before exporting same as refined products and like Qatar whose gas company processes natural gas into the finished products that are in high demand in Europe and most parts of the world.

Fittingly, the Sovereign Wealth Funds, SWF strength of both Saudi Arabia and Qatar, Norway, Sweden etc reflect how well they have managed their natural resources, while our nearly empty treasury, paltry SWF and debt overhang in excess of N77 trillion tell the tale of the recklessness of our past leaders who have been sustaining petrol pump price subsidy since about 1977 after squandering our wealth in hosting Festival Of Black Art And Culture, FESTAC that resulted in massive hatred and envy from the Western world leading to their sabotaging of our country via a malicious crash in international oil price that set the stage for the crash of our economy in addition to the profligacy and corruption that have literally left our country in utter ruination.

It is on top of that malfeasance that the immediate past administration fostered multiple Naira exchange rates that also encouraged arbitrage and further haemorrhaging of our country’s treasury that has brought Nigeria to its knees and a position from which President Tinubu must lift up Nigeria in order to stand upright.

The sorry state of the Nigerian economy reminds me of the lavishness of Venezuela, a neighbour of the US and a major crude oil and gas producer which l had earlier referenced.

As a socialist country, it was tied to the apron strings of the nation of Cuba, which when it was under the rulership of the late Fidel Castro, (a close ally of communist Russia when it was under the former strongman leader of the country, Hugo Chavez), was behaving more or less like Santa Claus donating its petroleum products to its neighbours in the region and the Caribbean.

As we are all aware, Venezuela is best known for being a poster child of what has come to be known as Oil Curse.

Being a country with hydrocarbon deposits should be a blessing and not a curse.

That is why quite unlike Venezuela, its other neighbour in South America, Brazil, another oil-rich country, is doing well with the state-owned oil firm, Petrobras.

So, it is owing to the welfarist policies of Venezuela via its association with socialist Cuba which is figuratively joined in the hips to socialist Russia, that there was suboptimal management if not outright mismanagement of its oil/gas resource.

That is what earned it the unenviable reputation of a country suffering from oil curse.

Nigerian leaders appear to have been toeing a similar path to Venezuela over the past years, hence our oil/gas industry kept tottering on the brinks of collapse before President Tinubu’s tsunami-like pronouncement on 29 May, turned the tide that promises to usher into the hydrocarbon sector and indeed the economy a flood of investments in the hitherto constricted industry operating on archaic policies.

Although the unshackling of the petroleum sector has taken too long to come, as the conventional wisdom goes, it is better late than never.

Who knows, maybe one day soon, the land use act that has been a constraint to business and industry may equally be reviewed to unleash the true and hidden value of land in the hinterland which presently, the owners can not use as collateral to acquire and secure loans that would enable them to pursue their entrepreneurial dreams in the way and manner that landowners in the metropolitan areas do.

Following the success achieved after opening up the oil/gas sector, perhaps the government would be encouraged to also reform the land use act that was last reviewed in 2005 or thereabouts and thus unleash the dead capital which the land in our hinterland has been.

And one thing for sure is that if President Tinubu succeeds in pulling off the end of the petrol subsidy plot, the latent and dormant potentials of our country that would be released could take our economy to the point that it could surpass that of the likes of Indonesia, which is a ($1.1billon) dollar Gross Domestic Product, GDP economy, roughly twice that of our country that stands at more or less $450 million.

It is a sad commentary that Indonesia has more than twice Nigeria’s GDP even though both the Nigerian economy and that of Indonesia were both at par in the early 1960s.

And the lack of dynamism in the review of policies to be in tandem with changing times our leader is the culprit.

But arising from the panic that President Tinubu’s pronouncement about the end of petrol subsidy triggered, perhaps out of mischief or ignorance, some pundits had started heating up the polity by condemning President Tinubu’s compliance with the Petroleum Industry Act, PIA, which demands that petrol subsidy regime terminates with the outgone government.

But it is fortuitous that resistance has ebbed considerably.

Nevertheless, it was rather odd and curious that in making the pronouncement that the era of petrol subsidy is gone, the president was only complying with the law of our land which is a commendable approach to leadership.

Yet some commentators were or are scoffing at the president for abiding by the laws of our land.

The reality is that what President Tinubu met and he is dealing with is that without a budget to continue with petrol subsidy, his hands are tied unless he decides to bend or break the laws of the land as most of his predecessors have done.

It is on record that the predecessor administration circumvented or bent the law by literally ‘kicking the can down the road‘ as preceding administrations before it has also been doing willingly or by being compelled to so do by the opposition political parties or organised labour via threats to or actually shutting down of the economy through the downing of tools by workers which has been the case on multiple occasions in the past.

So, in my assessment, the chaotic situation we are currently witnessing and which started barely twenty-four (24) hours after the ascendancy of President Tinubu into the throne in Aso Rock Villa seat of presidential power is a failure to communicate the reality of the precarious financial condition of our country viz-a-viz retention of petrol subsidy to the masses.

Plainly speaking, our country is in financial dire straits and if it must transition from financial recklessness which subsidizing Petrol pump prices and propping up the Naira against other foreign currencies are all about, hard decisions by our leaders have to be taken and sacrifices have to be made by fellow Nigerians both in and out of government.

And the failure to apprise the masses of that reality is the reason they are disappointed by what appears to them as if President Tinubu’s decision to announce a petrol subsidy is without giving due consideration in terms of sensitivity to the poverty level in Nigeria.

Unbeknownst to them, it is the PIA justifiably accented to by Tinubu’s successor in 2021 that abolished subsidy in the interest of the masses.

Arising from the above reality, the earlier the masses understood the underlying fundamental reasons for petrol subsidy removal, the better for President Tinubu and the new administration.

While on the one hand, a majority of the masses are crestfallen upon learning that the PMS subsidy has been removed.

On the other hand, the elites have welcomed the news because they are well aware of the reasons for the withdrawal of subsidy on petrol.

Hence the organised private sector and the equities/stock markets-local and international that are populated by the elite have reacted positively and the masses are still gripping.

In light of the dichotomy or divergence of opinion or feelings between the masses and the elites in Nigeria on the issue of petrol subsidy removal, it is easier to understand how conflicted Nigerians can be in the absence of information that would shed more light on prevailing challenges such as the current one that requires that the citizens are carried along.

The assertion above is underscored by the fact that while members of the elite are well informed due to their unfettered access to information, the masses are ignorant of the facts behind the decision because no deliberate attempt was made to enlighten them on the fundamentals of petrol subsidy and the perils it would entail sustaining.

And if the unfortunate atmosphere of apprehension that is currently gripping long-suffering Nigerians about PMS subsidy removal is not borne out of ignorance, how can the action of those condemning a positive action of a president complying with the law of the land be justified?

More so because the same masses had been castigating the outgone President Mohammadu Buhari and his predecessors for retaining a destructive policy for so long. The masses particularly have been vilifying President Buhari for his penchant for breaching or not implementing the laws of the land that do not gel with his personal agenda.

As a matter of fact, can the same Nigerians that have been advocating for petrol subsidy removal be backtracking if they were not starved of certain critical information?

Having identified the fact that the reason for the current tension is paucity or lack of effective communication with the hoi polloi, what is the panacea, readers may be wondering?

In response to the question, I would like to recommend that a robust communication package aimed at obtaining the buy-in of the masses for the removal of the petrol pump price should be put in place, immediately.

The truth is that selling to the masses the need to end the petrol subsidy should have come pari-pasu with the PIA.

But that critical action of enlightening the masses on the implications of petrol subsidy removal was not taken by the outgone regime and it now behoves relevant officials in the incumbent administration to do so.

It may be recalled that in 1984/5 when under the regime of military head of state General Ibrahim Babangida, the need for a Structural Adjustment Program, SAP, which was part of world bank conditionality for Nigeria to be eligible to obtain a badly needed loan facility, most Nigerians were against it.

To secure the buy-in of the people after the government decided not to take the loan, a ferocious media blitz was deployed to enlighten the masses and calm frayed nerves.

I can recall that as a young reporter with Nigerian Television Authority, NTA back in the mid-1980s, a senior colleague, Mrs Chris Anyanwu, (later a Senator) presented news reports whereby the price of a bottle of Coca-Cola was compared to petrol as a contest in the same bottle.

It was concluded that the sugared water (which Coca-Cola beverage really is) was more expensive than petrol.

Such powerful imagery helped to a large extent to sway the masses towards accepting that some level of subsidy in petrol pump price had to go.

A similar media campaign/blitz is required to justify the need to end petrol pump price subsidy to Nigerians that are bearing the brunt of postponing the evil day reminiscent of the narrative in the fable: “Who Will Bell The Cat”, which is a narrative of where rats were supposed to put a bell on a cat that had been terrorising them.

The idea is that when the cat shows up in the rats’ domain, the jingling of the bell would alert them to go into hiding to avoid being eaten by the dreaded cat.

Apparently, by announcing the end of the petrol pump price, Tinubu has shunned being a coward by electing to be the one to bell the cat which is a task that all other rats have in trepidation demurred from executing.

That is a simple analogy of the situation in which President Tinubu finds himself.

Could our new president now being seen as a villain become a hero when the salutary benefits from petrol subsidy removal begin to kick in?

The other snag thrown up by the scrapping of petrol subsidy is the claim in some quarters that the timing for the announcement by President Tinubu is wrong.

The truth is that there is no such thing as the right time to do anything, but the courage and political will of a leader to do the right thing is often in short supply.

In the current situation, President Tinubu has exhibited a huge appetite for courageous and bold actions by complying with the provision in the PIA which is more or less the operational manual for the petroleum industry in Nigeria.

In light of the above, the pertinent question to ask is are those against petrol subsidy removal in the manner that President Tinubu announced it in his inaugural speech suggesting that he should break the laws of the land that has cancelled the policy via the provision in Petroleum Industry Act, PIA by postponing the evil day and continuing with the policy that has been abolished by PIA which is the holy grail of the petroleum industry?

It is worthy of recall that previous leaders going as far back as the regime of General Olusegun Obasanjo when he was military head of state 1976-1979 and all the others in between, up to the administration of ex-President, Goodluck Ebele Jonathan, in 2010-2015 had attempted to end the subsidy without success.

The truth is that each time our political leaders failed to do the needful by not removing petrol subsidy, they were guilty of literally throwing Nigerians under the bus, to virtue American lingo.

Indeed, they were engaging in foot-dragging and perhaps unwittingly exposing the nation to the manipulation of vested interests such as international petroleum dealers who are engaged in shipping petrol to Nigeria, foreign refinery Turnaround Maintenance, TAM contractors along with their local partners who are permanently on the job, electricity power generator sellers, electricity inverter dealers who are the direct beneficiaries of the wrong-headed policy and would be the losers when our leaders do the right thing.

More often than not, it is the above-listed major players in the sector that are providing alternatives to energy insecurity wracking our country who always move in to sabotage the efforts of our leaders that try to scrap petrol subsidy by offering their alternative energy options that are highly expensive, price wise and environmentally unfriendly.

And it is well known in the industry that it is the referenced cartels that have either been successfully scuttling or making sure that the petrol subsidy removal policy was only partially implemented.

In my reckoning it is in the bid to avoid being caught in the sinister web or trap of the vested interests as earlier highlighted that might have informed President Tinubu’s decision to be swift in the action of complying with the conditions contained in the PIA from the get-go and without further ado hence he announced the end of petrol subsidy in his inaugural speech.

And I would also contend that in effect, not implementing a temporarily painful, but beneficial policy of petrol pump price subsidy removal would amount to playing with the destiny of Nigerians by sustaining a petrol subsidy regime that has left our country permanently in the sick bay.

For some of us that have been closely following the politics of energy insecurity in Nigeria, criticism against the decision by those who should know can be likened to the situation of wanting to eat an omelette without cracking an egg.

Although most Nigerians do not subscribe to the idea of flushing down the drain a humongous amount sunk into petrol subsidy which is estimated to be N400m daily, some are taking exception to the way and manner in which the announcement was made.

For that reason, they are casting aspersions on it simply because the palliatives to ameliorate the anticipated hardships that have already been unleashed on the masses were not contained in the inaugural speech.

Except for those who want to be mischievous, it is practically impossible for President Tinubu to have announced a new policy position in his inaugural speech and also give a breakdown of the initiative in detail as demanded.

He has not assembled a cabinet yet.

Even if he has named ministers, they would be subject to approval by the National Assembly, NASS and the Senate in particular. At the present time and until 13 June or thereabouts, the NASS would not be inaugurated.

It is quite encouraging that the ongoing consultations between the presidency and organized labour have offered both sides, the opportunity to hash out measures that could serve as a buffer for the masses as they endure the misery of the change which can be likened to the pains suffered by women during childbirth and the joy that follows upon safe delivery.

In the meantime, as l had advised in a previous article published on 9 May and titled: “Judiciary On Trial: Televising Tribunal Proceedings To The Rescue?” I believe that a necessary first step to absorb the harsh effects of petrol subsidy removal should be a one hundred percent (100%) increase in the salaries of workers:

“In my view, petrol subsidy must end as planned and a 100% increase in salaries for workers across the board would be a necessary first step to ameliorate the consequential effect. But that is a subject for another discourse. A hundred percent increase in salary for public servants would offer immediate relief from the rise in the cost of transport which would lead to an increase in the cost of food and other essential services.”

So, the position that l am canvassing now has been the same way back in the month of May which was long before Asiwaju Tinubu was sworn in as the president of Nigeria on Monday 29 May.

And it is rather striking as President Tinubu has in a bid to stave off the threat to go on strike by workers on Wednesday 7th day of this month of June, and an action which has been postponed, revealed that he would subscribe to a wage increase for workers to cushion the effect of the petrol pump price subsidy removal.

At the same time, the Trade Union Congress, and TUC demanded N200,000 minimum wage increase from the present N30,000, which seems unrealistic, but it is a basis for negotiation.

In the end, l reckon that a 100% wage increase across the board appears to be the lowest-hanging fruit.

In the organised private sector, OPS should also be encouraged to offer workers in the private sector one hundred percent (100%) salary raise despite the inflation implications. And that can be done by the government via the encouragement of the OPS by way of granting the sector operators some tax break at least for the next six (6) months.

In fact, there are a plethora of concepts that could be adopted to reduce the burden.

They include the reduction of the number of days that workers could attend work physically per week.

Commendably, some states such as Edo and Kwara have already introduced such policies.

Some pundits have also proposed the introduction of food stamps as another measure that could facilitate defraying of the cost of transportation.

As for the poorest of the poor, several analysts have pointed out that the sum of $800,000 approved by the legislative arm of government for the executive branch to borrow from the world bank aimed at cushioning the harsh effects of PMS subsidy removal should be channelled into giving the vulnerable in our society succour.

Those knowledgeable in finance have stated that when shared amongst the fifty million (50m) poor and vulnerable Nigerians that are being targeted, the amount receivable by the beneficiaries would be N5,000 per individual in ten (10) million homes with an average of five (5) in each household.

That is if the $800m is converted at the official exchange rate of the naira to the dollar which is currently around N465 to one dollar ($1).

In specifics, that would translate to more or less N465 billion and the beneficiaries would receive N5,000 transferred to each of the 50 million Nigerians believed to be living below the poverty line of two (2) dollars per day.

Experts on the matter contend that the provision of a social safety net for the vulnerable Nigerians estimated to be 50 million people can receive a direct cash payout which can be sustained for about six (6) months.

In my view that is ample time for the new administration to decide what it would do with the estimated ten trillion (N10t) trillion naira that has been spent between last year and the first half of this year -June for subsidising petrol pump price which would be channelled into the productive sector.

As most of us are well aware, the transfer of stipends directly to the poorest of the poor can be likened to the Dole system which is a type of unemployment insurance funded by the government in the United States of America, USA.

Although the concept would be a stop-gap measure, it can remain a social safety net measure that should be retained.

However, the number of those living below the poverty line or less than $2 dollars a day, perhaps the 133 million multidimensional poor, needs to be scientifically determined and verified because as most Nigerians agree, the current statistics being bandied around is likely to be bogus and therefore a scam.

If nothing else, the policy initiatives of 100% salary raise for workers both in the public and private sectors and the disbursement of the $800m world bank loan to the indigent would enable the new government to buy time before it comes up with a viable and sustainable solution to the fiscal challenge posed by the subsidy regime that has become entrenched such that it is practically impossible.

President Tinubu enumerated what may be done with the savings from petrol subsidy removal in his inaugural speech:

“We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favoured the rich more than the poor. The subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.”

It is a pledge that he has re-emphasised in his democracy day speech on Monday, June 12. And he has backed his words with action by signing off the new law that would facilitate the granting of loans to indigent students that need help which is in consonance with his promise to plough the funds hitherto sunk into petrol subsidy into the education sector amongst others.

By now it should be clear to the wise that a highly destructive governance gambit such as subsidising the consumption of petrol which became entrenched in our system since the 1970s, particularly after the discovery of crude oil in Oloibiri, Bayelsa state in 1956, must be done away with through intentional and aggressive measures.

In the same manner, the antiquated laws on electricity generation and distribution that have kept Nigerians in perpetual darkness have just been replaced with the ones that would change the electricity generation and distribution landscape.

That is simply because the challenges facing Nigeria would not just disappear by mere wishful thinking but through decisive actions as President Tinubu has boldly been doing to save the country in less than two weeks of being the first citizen of Nigeria.

We pray that the tempo of reform would be maintained and well implemented.

By Magnus Onyibe


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