THE plan by the Federal Government to remove subsidy on petrol and similar products is unpopular not just because Nigerians are averse to the imminent price increase it will certainly engender, but also because of its adverse boomerang effect on all aspects of the nation's economy. Worse still, there is absolutely no guarantee that government will indeed cushion the effects of the withdrawal or manage the saved funds for the citizens' benefit.Nigerians are becoming acclimatised to the monotonous sing-song of successive governments about fuel subsidy. From Babangida to Obasanjo and now Jonathan, all have sought to remove the fuel subsidy. Indeed, many Nigerians were of the view that former President Olusegun Obasanjo having increased fuel prices five times during his tenure had put paid to the fuel subsidy controversy.According to President Goodluck Jonathan, the subsidy on petroleum products, far from diminishing, has in fact increased to the tune of some N500 billion per annum. He has announced his intention to seek the abolition of fuel subsidy beginning from January 2012. He says that continuing the subsidy has become unsustainable and that in the first phase of its abolition, some N1.2 trillion would be saved. This money, government sought to assure Nigerians, would be used to revamp infrastructure, build more refineries and provide safety nets for the poor.Many informed Nigerians, including a former Minister of Petroleum, have said publicly that at current prices, there is no subsidy; and thatNigerians are only being called upon to subsidise the corruption that has been built around the oil business. The only way to debunk the former minister's assertion is for government to produce its own figures. Just what goes into the pricing of a litre of petrol at N65' Reeling off ballpark figures will not satisfy the people. A bottle of anything can be segmented into proportions and prices. So, what are the components for petrol in simple language'This call for the removal of fuel subsidy is coming at a time when the Naira is depreciating in the foreign exchange market. Presumably, the subsidy would have been reducing had our currency been appreciating. Secondly, the push is coming at a time when many governors have said that they have difficulty in paying the legislated minimum wage of N18,000. They have not hidden the fact that they are hankering after the removal of fuel subsidy in order to plough into the released funds to pay the minimum wage. Can Nigerians be assured that monies released from this effort will indeed be used for paying the minimum wage and its ripple effects'This preachment from Abuja is disturbing. The greatest obstacle facing government in its quest to redistribute national resources ' for that is what the removal of subsidy really means ' is its record. When have our governments judiciously and transparently redistributed the national income' What do they mean when they say that removal of the subsidy will create a safety net for the poor' But the poor must feed and right now when petrol is retailing at N65 a litre and kerosene at about N85 a litre (it is almost impossible to get it at the approved N50), they are having a hard time of it. At triple that price, the poor will go hungry. Removing the subsidy, if any still exists, will create unimaginable inflation in this country. It will make nonsense of the N18,000 minimum wage as the recipients would find that they were better off when they were earning N7,500.We have repeatedly called for the rehabilitation of the old refineries and the building of new ones. Nigerians will be prepared to pay whatever is the going rate for petroleum products when we refine the product ourselves and desist from exporting Nigerian jobs abroad. Government has been toying with this idea of new refineries for more than 10 years, promising and hatching schemes that led to nowhere. It seems that government has resigned itself to the perpetual importation of refined petroleum products by a favoured cartel, which buys crude oil cheap and sells back the refined product at high prices. The oil sector is riddled with corruption, and the NNPC representing government interest in the sector is apparently at the heart of it. How can Nigerians believe government when it says it will use the money saved from fuel subsidy to build refineries' We have heard that before. Government may as well be planning to build more refineries ' in Indonesia!Government says it will rebuild our infrastructure from money saved. The word infrastructure is such a loose term, it would be more meaningful if it was narrowed down to particulars with a timeline, like the Lagos-Sagamu-Ore-Benin expressway or the rehabilitation of the previously identified Centres of Excellence for healthcare delivery or the commencement of the building of a modern railway based on the standard gauge. So far, Nigerians have been fed with vague promises and let down many times. Vague statements of intent will not do this time.Subsidy is not a taboo. All governments subsidise something. For some, it could be agriculture, for others, it could be health care or education. For Nigeria where governments make little or no provisions for the needs of the people, it can and has been by longstanding tradition affordable fuel. If this one and only subsidy is withdrawn from the people, in what way can they be said to be advantaged as oil producers' In what way will government be fulfilling its duty of care and welfare for the people'Government should do a thorough homework before contemplating the removal of petroleum subsidy. At the moment, there is lack of transparency, a point so well articulated by Senator Bukola Saraki in his motion asking for a probe of the so-called subsidy. Some even say lack of sincerity, in the whole exercise.Given the multiplier effect of this commodity, any withdrawal of subsidy, if not carefully managed, could provoke a great deal of unpleasant ramifications.
Click here to read full news..
