THE policy implementation is still about three months away. But at the weekend, many fuel-dispensing stations have started constricting their pumps some from 12 to three or four ostensibly to create artificial scarcity. And when there is scarcity, Nigerians throw up their hands, adjust their budgets and buy at whatever price the cost of Nigeria's most essential commodity: Premium Motor Spirit (PMS) otherwise called petrol.The tale of the costing of petrol has been with the nation since 1973 when the military government of Gen. Yakubu Gowon raised the litre price from 7kobo to 9kobo.But after that raise, the singsong of every government since then had been it was subsidizing the cost of petrol even though no one had specifically calculated the exact cost of the subsidy.It was therefore following a familiar terrain when the government of President Goodluck Jonathan announced a fortnight ago that it would finally remove this elusive subsidy from January 2012, about three months from now.Since the announcement, various sides have been strategizing how they would confront the monster that would be unleashed on the nation from the New Year.There have been threats and tepid appeals from the two opposing sides to the subsidy removal issue.When the first ever raise was made in 1973, owing to the rigidity of the military system then, many Nigerians, including Labour, could not but mildly react to the increase. No one projected that it was a harbinger of a long torture of fuel crises.After that, the situation has been repeated several times, even under civilian governments. However, President Jonathan's January 2012 project would follow the familiar path.Going by the pricing template of the Petroleum Product Pricing and Regulatory Agency (PPPRA), the landing cost of petrol is N124.78 a litre, while it is expected to sell for N140 a litre, if subsidy is eventually removed as proposed by Dr. Jonathan.This has immediately elicited various reactions from the stakeholders with divergent views of what is likely to be its effect on the economic wellbeing of the Nigerians. While some are against the move, others believe it is in the right direction. Who is trailing the right direction' Analysts believed that only time would tell.However, there are worries that the tangle between the Federal Government with the support of elected governors on the one hand and Organised Labour acting on behalf of the masses on the other hand, would bring about another disruptive crisis, the type that was witnessed during the regime of former President Olusegun Obasanjo.Obasanjo had shown so much interest in accumulating revenue through petroleum products which Nigeria is endowed with. He was the second head of state to increase fuel prices in 1979 during his first coming as military head of state. He moved it from 9k to 15k a litre.Obasanjo and former military president, Gen. Ibrahim Babangida have something in common. Both have a strong affinity for increasing the prices of petroleum products.Between the two, the price of petrol was hiked 10 times. As Gen. Obasanjo, he hiked the price of petrol once, while Babangida did it four times.On returning as a civilian president in 1999, one of Obasanjo's first official assignments in the oil sector was to raise the fuel price by about 98 per cent. Thus, he hiked the price from N20 in 1999 to N75 in 2007, representing 375 per cent.Obasanjo's parting gift to Nigerians on the eve of his departure from Aso Rock was a hike in the price of petroleum products. It was his seventh between 1999 and 2007.Each hike was accompanied by protests and strikes as opposition had always followed any price hike. Each hike always added to the burden of the citizenry. Usually, there is a sharp increase in transport cost and prices of goods and services.Many Nigerians, civil society groups, Labour and opposition parties greeted the present increase in prices of petroleum products with anger. The protest is against the doubled Value Added Tax (VAT), the fuel hike and the sale of the nation's largest oil refinery. .In 1986 Babangida took the price to 39k a litre. In 1990 he raised it again to 51k and the to 70k in 1991. In 1993 it went up still to N3.25 a litre under Babangida's governmentIn 1994, the late Gen. Sani Abacha took it up to N11 a litre and in 1997, he topped it to N20. He then set up the Petroleum Task (Special) Force (PTF), to use the proceeds for development of infrastructure and social amenities. This is not too far from what President Jonathan is clamouring for, when he said that the subsidy has eaten deep into Nigeria's purse.The President of the Trade Union Congress, Mr. Peter Esele had noted that if the past governments had made good of their promises, the present government would not be talking about removal of subsidy to increase revenue for infrastructural development.Since then, the price of fuel has continued to rise. Obasanjo increased fuel price from N11 to N20 a litre. On June 13, 2000, it rose to N22 and on June 1, 2002, to N26.Between June 2003 and October 2003, the price went up to N34 a litre and later N42 a litre. In 2003, Obasanjo for the first time introduced petroleum tax in place of another attempted increase of petrol pump price, which was stopped by Nigeria Labour Congress' (NLC) nationwide threanedstrike.In May 29, 2004, the price went up to N50 a litre. August 25, 2005 it shot up to N65. May 27, 2007 it rose to N75. Then it was reduced for the first time back to N65 from N75 by the late President Umaru Musa Yar'Adua.The only reason often claimed for the hike by all governments was that the government was subsidizing the price of petrol by various figures.Esele said: 'The way they are going, they want the fence of the Nigerian nation to fall, and I can say that the effect of the whole deregulation will be on the economy; they are only thinking of the additional money that will come to their pockets and not the impact on the whole economy and the overall effect on ordinary citizens,' he said.The TUC President said the National Executive Council (NEC) would meet in November to make a pronouncement on the government's decision, adding that Labour and civil society groups would endeavour to provide a platform for all Nigerians to see the evil in the removal of the fuel subsidy by the government.Esele who had on several occasions warned the government against removal of fuel subsidy except all necessary infrastructure were in place, alleged that government was broke and desperately looking for where it could get cheap money to finance its projects without first pruning its recurrent expenditure.Despite the Labour threat, the state governors are pushing forthe withdrawal offuel subsidy in order to shore up their revenue base.The Senate has, however,kicked against the moveeven though President Goodluck Jonathan thinks that the subsidy would be removed from January 2012, to save about N1.2 trillion incurred on subsidy yearly.President Jonathan had said: 'A major component of the policy of fiscal consolidation is government's intent to phase out the fuel subsidy beginning from 2012 fiscal year. This will free up about N1.2 trillion in savings, part of which can be deployed into providing safety nets for poor segments of the society to ameliorate the effect of the subsidy removal.'The Executive Secretary, MOMAN, Mr. Femi Olawore, told The Guardian at the weekend that subsidy was the bane of the nation's economic development, adding that the Federal Government did not have the money to continue paying fuel subsidy because it was an unnecessary drain on the revenue of government.He explained that in the short run, there might be problems associated with the high cost of food in the country and that the Federal Government must create palliatives.
Click here to read full news..
