BEFORE the discovery of oil in 1956 in Oloibiri, formerly of the Eastern Region but now in Bayelsa State of South-South geopolitical zone, corruption in government was low. But everything changed when oil started pouring in from the land in commercial quantities in the 60s.Still, when Nigeria was at war between 1967 and 1970 (a fallout of the 1966 coup and counter-coup) and, indeed, before September 1978, there was no increase in the pump price of fuel. The price per litre stabilised at 8.50k.However, the stability of the pump price was shattered by General Olusegun Obasanjo's government, which took over power after the demise of General Murtala Muhammed in a bloody coup on February 13, 1976.Surprisingly and disappointedly to most Nigerians, Gen. Obasanjo, in a national broadcast on October 1, 1978, announced the sudden increase in the price of a litre of petrol from 8.50k to 15.30k.Reasons the Obasanjo administration adduced for the almost 100 per cent increase were as follows:' That most petrol users were using the commodity more for pleasure and there was need to bring discipline into the society.' That the government had been subsiding the price of petroleum products with more than N95 million every year.The increase did not provide any economic succour or wellbeing for the teeming Nigerians, especially the less-privileged ones who were in the majority.Due to the protests that trailed the increase, particularly by Nigerian students, the National Union of Nigerian Students (NUNS) was proscribed and its then president, Mr. Segun Okeowo, was arrested and detained.President Shehu Shagari, who succeeded Gen. Obasanjo in office in 1979, continued the policy of fuel price increase. Thus, on April 20, 1982, the civilian head of state announced another increase in the pump price of petrol from 15.30k to 20k.The reasons Shagari gave for the increase were:' The introduction of austerity measures.' To stop subsidizing petrol consumed locally.As usual, Nigerians swallowed the bitter pills after government refused to yield to strike and resistance from the labour unions.But the highest number of indiscriminate increases of pump prices was witnessed between August 27, 1985 to August 26, 1993 when the then self-styled military president, Gen. Ibrahim Babangida, hiked the price of petroleum per litre five times on the excuse of subsidy but without anything positive to show for it.On March 31, 1986, Babangida increased the price from 20k to 39.5k. Two years later, precisely on April 10, 1988, he increased the price from 39.5k to 42k.On January 1, 1989, in what many Nigerians saw as a bad New Year gift to them, Babangida again increased the price of fuel from 42k for commercial vehicles and 60k for private vehicles.On December 19, 1989, he raised the price from 42/60k to a uniform price of 60k for all vehicles.In all the increases, the reasons Babangida adduced were not far from that of Obasanjo and Shagari, which was to reduce or remove or cushion the effect of subsidy on the economy. But for his last increase of price to 70k on March 6, 1991, Babangida, having run of out reasons, did not give any for the escalation.HOWEVER, the highest jump in the incremental prices of fuel was done by the short-lived interim administration of Chief Ernest Shonekan on November 8, 1993 from 70k to N5 per litre ' over 700 per cent increase.That was ridiculed as the only 'achievement' of the Shonekan government, which was supposed to calm the raging fire in the country, aftermath of the Babangida administration's annulment of the June 12, 1993 presidential election.Following protests from Nigerians, the late Gen. Sani Abacha government, which booted out the Shonekan interregnum, reduced the price from N5 to N3.25k.Abacha's reason for the reduction was that the future prices of petroleum products should not be politicised, but be based on socio-economic consideration and in the spirit of the memorandum of understanding on the plight of the Nigerian people.With this development, many Nigerians saw Abacha as a messiah that would save his people, without knowing that his intention and action were not altruistic.Surprisingly, Abacha, on October 2, 1993, increased the pump price from N3.25k to N15. His reason was premised on the subsidy removal. But following protests against the increase, he reduced the price to N11 two days later; that's on October 4, 1994.Interestingly, Abacha promulgated the Petroleum (Special) Trust Fund Decree No. 25 of 1995, which he amended by the Petroleum (Special) Trust Fund (Amendment) Decree No 1. of 1995, and Section 2(1) of the decree exposed to Nigerians the lies of subsidies claimed by the government.For every litre at N11, the costs were stated as follows: Cost of crude: N2.35k; excise duty and VAT: 0.35k; marketer's allowance: N1.390k; NNPC cost and margin: N1.70k; total cost, including hidden profits: N5.68k.Consequently, under Abacha's administration, every litre of fuel had a profit margin of N5.32k; thereby making it clear to Nigerians that there was no subsidy in petroleum products, as claimed by his government and previous governments.Yet, with the glaring facts, General Abdulsalami Abubakar's administration, on December 20, 1998, increased the price from N11 to N25. His reason was that market forces should be allowed to take control of the citizens' destiny. But following nationwide protests over the increase, the government reduced the price from N25 to N20 on January 6, 1999.ON his return to power again as civilian president in 1999, Chief Obasanjo continued from where he let off in 1979: 20 years interval. It was as if he wanted to out-perform his predecessor in office ' Gens. Babangida and Abacha ' in the urge to increase prices of petroleum products.But Obasanjo had to emulate the Abacha and Abubakar method: First increase the price; then, after protests led by Labour, reduce the hike by some percentages. It was a strategy that 'worked' over and over again.Hence, on June 1, 2000, just four days after he was sworn-in, he increased pump price of fuel from N20 to N30. But a massive protest by the labour unions compelled him to reduce the price to N25 on June 8, 2000.Still, Nigerians and the labour unions rejected the reduction, prompting the government to further reduce the price to N22.On January 1, 2002, Obasanjo increased the price again to N26. His reason was not far from the subsidy effects.Also, on June 23, 2003, he increased pump price from N26 to N40. Then, in January 2009, he hiked the price from N40 to N55. Dissatisfied Nigerians could not reverse those three consecutive pump price increases.It is worthy of note that on the eve of leaving office on May 29, 2007, after his second term, Obasanjo jerked up the price of the product to N100 per litre and his reason was that if Nigerians could spend more than N100 in buying a bottle of beer, why couldn't they buy fuel at N100 per litre.It would also be recalled that Obasanjo's aides had already been floating the idea of fuel price increases under a contentious deregulation programme.Nonetheless, some critics claimed that the outgoing president effected the price hike to one, punish Nigerians for rejecting his bid to elongate his tenure through a bogus 'Third Term' project; and two, to help then President-elect, Alhaji Umaru Musa Yar'Adua, who had publicly washed his hand off increased prices of oil products.Obasanjo, therefore, put the incoming government on a collision course with Labour and aggrieved Nigerians. But on assumption of office, Yar'Adua reduced the price of the fuel from N100 to N65, which the Goodluck Jonathan government is trumpeting to change to as high as N140 to N155 per litre in its proposed total deregulation of the oil industry and removal of subsidy from petroleum products.The government is advancing the same excuse of yesteryears: that it is spending billions of Naira to subsidize the products for Nigerians.Many Nigerians believe that no subsidy really existed on petroleum products; rather, it is a coinage by successive governments, which served as conduit pipe for corruption in the oil sector.A top official of the Nigeria Labour Congress (NLC) told The Guardian that government was facing financial difficulties after spending so much money during last April's general elections.'They (government) are now looking for means of getting easy money for them to loot,' the union leader said. 'That is why they want to increase the pump price, but Nigerians will resist it.'Their next excuse will be the new minimum wage, which they (federal government) are not paying and majority of the state governments are not paying too.'The Minimum Wage AngleTo Fuel Subsidy RemovalPLACING the indiscriminate increases in the price of fuel per litre by previous governments side by side the increase in the National Minimum Wage; it is obvious that successive governments had been unfair to the Nigerian workers and the rest of the people.After independence, precisely on April 1 1974, the minimum wage was increased from N26 per month to N60. On September 3, 1981, the Shagari administration increased the wage from N26 to N125; and the Babangida government increased it from N125 to N250 per month on December 31, 1990.For more than 10 years, there was no increase in the wage, but there was consistent increases in the price of fuel.On May 1, 2000, the then President Obasanjo increased the wage from N250 to N5,500 for states' civil servants and N7,500 for federal civil servants.Looking at the various increases, the mathematics is simple. In 1981, a Naira exchanged for $2. Therefore, the N125 minimum wage of 1981 was equivalent to $250.By today's exchange rate of N150 plus to a dollar, the exchange rate of the $250 monthly pay of 1981 would amount to N37,500, which is 100 per cent more than the current N18,000 minimum wage.So, why are the state governors claiming they would not pay the N18,000 without creating a major dislocation in the governance of their states.The governors seem to have suddenly remembered that the revenue sharing formula that was supposed to be reviewed every five years, but which was untouched since 2000, is due for review.The present sharing formula allocates about 52 per centof revenue to the Federal Government, while the States, Local Government Councils and some agencies share the remaining 48 per cent.Besides, the governors remembered that the subsidy the Federal Government claimed to be spending on petrol was too much and the solution lay in the touted increase in the price of fuel to about N150.According to the chairman, Nigeria Governors' Forum, Rotimi Amaechi of Rivers State, the needs and challenges of each governor differ from state to state and, therefore, while some governors would be able to pay the minimum wage effortlessly, others would find it really difficult to pay.Last year, the subsidy claimed on petroleum products was in excess of N500 billion. But as at June this year, according to reports, the subsidy had exceeded the N500 billion benchmark. What this means is that, at the same rate, the subsidy cost at the end of the year would hit N1 trillion.But the argument is immediately deflated in the face of the content and context of the subsidy. What is the subsidy for'In plain, simple language, according to a Labour source, 'it is made up of costs borne out of pure inefficiency and an inability to be creative in managing governance.'Nigeria's refineries are working, but the capacity at which they operate only amounts to less than 30 per cent of national needs.No new refineries have been built since 1999 when the civilians came in ' not that any had been built since the Kaduna Refinery was commissioned in the early part of the last quarter of the last century ' some three decades ago.'With massive importation of petrol into the country and the inefficiency at the ports, what constitutes the subsidy is a mirage of demurrages, transportation, shipping, banking costs, bridging costs, laziness, inefficiency, greed and ineptitude ' all these come together to make for the cost of subsidy,' said the labour respondent.
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