SINCE the discovery of oil in Nigeria, successive governments had hidden under the cover of subsidy to hike the prices of petroleum products without much to show for it thereafter.The incessant hike in prices became more pronounced during the regime of the late Gen. Sani Abacha when it became obvious that the country had to depend majorly on importation of products for domestic consumptions.It was obvious that the billions of naira spent annually for Turn Around Maintenance (TAM) of the refineries was a hollow ritual, as the refineries could not function optimally to meet the domestic needs.Subsequently, no government ever tried to build new refineries, rather they continued to subsidise the imported products with glaring cases of corruption and inefficiency in the oil sector.In what looked like starting from where his predecessors stopped, President Goodluck Jonathan some months ago officially made known his plans to remove the oil subsidy by next year.Ever since then, the argument for or against the removal has intensified unabated. Those in favour of the removal, mostly cabinet members, state governors, allies of the government and others, had argued that subsidy hardly benefits majority of Nigerians.They added that it only benefit an exclusive class or 'cabal' of petroleum importers and in the face of dwindling revenues, the close to N1.3 trillion spent annually on subsidising fuel is unsustainable, especially as it could be used for development projects and provision of infrastructure.Government has threatened that if the subsidy is not removed, its activities might collapse.Federal governments' stand on the policy has been supported by the state governors, who believed that the removal would make enough funds available to them in the long run.Many had thought that with Jonathan's hard stance on the removal, he would make it official during the budget presentation on Tuesday.But surprisingly, the President was mute on the planned removal, though it was revealed that he tarried on the issue during presentation, because of some security reports that some members of the National Assembly had concluded plans to humiliate or boo him at the presentation if he announced the removal.But according to the Minister of Finance and Head of the Economic team of the government, Dr. Ngozi Okonjo-Iweala, 'the President is still consulting with the stakeholders on the planned removal.'A few weeks ago, the list of oil companies that have benefitted or are still benefitting from the subsidy were disclosed by the Senate Committee on Petroleum (Downstream).Since the disclosure, nothing much has been heard again about it.But those against the removal argue that such a move, which is seen as the only way most Nigerians get their 'share' of massive oil revenues, would lead to an over 100 per cent increase in the price of fuel, with a devastating effect on the entire economy and thereby bringing untold hardship on the common man.Among those against the removal are former Head of State, Gen. Yakubu Gowon (rtd), the Nigerian trade unions, civil society organisations and others.Their position is that government should rather plug all the loopholes in the oil sectors that have led to high level of corruption and ineptitude.Many even argued that subsidy is hoax that only exists in the minds of government officials and their allies, who are in the majority of beneficiaries of the subsidy, with government support and protection.As the controversy rages, certain questions have remained unanswered, especially by the federal government, despite their unclear and sketchy explanation on the policy, not just on whether subsidy should be removed or not, but on what exactly the policy entails and its consequences.The government appears to be secretive, vague and ambiguous on its exact plan of action to this end and how the funds/proceeds that would be realised from the removal would be utilised in realising all the promises of infrastructural provision and investment in capital projects.How they would address the inevitable inflationary pressures that would occur and what palliative measures would be put in place to minimise and cushion the harsh effects of these inflationary pressures on thepopulace and on the economy are also begging for answers.It has become obvious that the more government officials tried to explain, the more Nigerians oppose the policy, because divergent reasons have been adduced from government circle on the issue.It was disclosed that before now, government had budgeted huge sums of money for media propaganda on the policy.It could be recall that Nigerians became aware of government's plans to remove fuel subsidy from rumours a few weeks after the inauguration of Jonathan as President, which the government denied vehemently before the bombshell was dropped in the National Assembly.As if that was not bad enough, the government to date has neither made any concerted effort to properly engage the civil society, academics and the general public, nor does it have a coherent policy document or blueprint with a clear breakdown of the amount of PMS (petrol) consumed daily/monthly/annually and the quantity of PMS refined and produced domestically, viz-a-viz the amount imported; the exact amount of subsidy that covers what percentage of PMS.Others are the exact manner in which the 'cabal' is fraudulently benefiting from fuel subsidy at the expense of Nigerians; measures to be taken to combat this fraud and bring these perpetrators to book; a projected timeline of how subsidy would be removed and how the funds would be utilised; the short, medium and long-term effects it would have on the economy; a timeline of rehabilitation of existing refineries and how many new ones would be built over what period of time and how the supply structure of fuel would be overhauled.While government has repeatedly stated that subsidy only benefits a few middle class to upper class Nigerians at the expense of common Nigerians, it remains very vague on how it intends to use these funds to the gain of Nigerians.We have learnt that the proceeds from the removal of the subsidy would be used in building infrastructure, schools, hospitals, roads and refineries.Vice President Namadi Sambo on December 13, while engaging some members of the civil society, said a subsidy savings management programme would be unveiled with which Nigerians can monitor the utilisation of these funds.Since this was announced only after the subsidy-removal debate had raged on for months with barely a month to the implementation of the policy proper, it could rightly assume that this came as an afterthought to the government in a ploy to pacify angry Nigerians, especially as the plan lacks detailed explanation.Given the known inefficiency, leakages, corruption, waste, mismanagement and excessive bureaucracy that characterise the management of public funds, many wonder what assurances Nigerians have that the management of subsidy proceeds would be any different from the norm'Most importantly, it remains unclear what palliative measures would be put in place to take care of the inflationary pressures on Nigerians, which would inevitably abound from the removal.As Okonjo-Iweala announced, the price of PMS per litre would go up from the current official rate of N65 to more than N120 and up to N150 ($1) in some places.Though she said 'palliative measures' would include the launch of the Subsidy Reinvestment and Empowerment Programme (SURE), maternal and child services, youth employment programmes, urban mass transit, infrastructure projects etc, but to majority of Nigerians, these proposed programmes remain vague and disjointed, because they would simply be a duplication of functions of already existing ministries and parastatals.Many believe it is difficult to envision how maternal and child services would, for instance, curb inflation.So, the cost of foodstuff and consumer goods, school, hospital and banking services, transportation fares and everything else would be expected to skyrocket.This inflation is inevitable, yet the government has kept mute on how exactly it would tackle the effects of these anticipated problems.Are there going to be special social benefits to be handed out to Nigerians' If so, what form would it take and how would it be disbursed'Most analysts believe the unnecessary tension in the polity and controversy surrounding the planned subsidy removal could have been largely avoided if government had been more adept and tactful in its political communication with stakeholders and with Nigerians.However, the manner government has approached the issue with secrecy and lack of consultation at the onset, only now engaging some members of civil society not to engage them critically, but just to win them over, even so without a clear policy statement is fuelling the fire of this controversy and making the real motives of government suspect.It remains to be seen how things would pan out in the next few weeks and how long government would continue with this approach in trying to win over Nigerians to buy this highly unpopular, and controversial policy decision.
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