Monday, October 24, 2011

Ongoing Concerns: Fuel Subsidy Removal (FSR)

I have read many articles decrying the decision by the federal government of Nigeria to remove fuel subsidy. I have also watched many interviews on TV and listened to many radio programs about this issue. It has topped the chart on the front pages of most Nigerian dailies since the day it was announced. Some persons speak for the motion while some take the opposite stance.

I have worked in the Oil and Gas industry all my career life and so I know a thing or two about the oil (my friends from the delta pronounce it oyel) and its transformation into the popular products called petrol, kerosene and diesel. I have trained delegates on the act of refining crude and its operation. What I do know is that there is no ambiguity in the refining process; even youths of the Niger delta refine crude in their backyards! They utilize crude (unsophisticated) methods of refining crude which they lay their hands on through whatever means. The process is called fractional distillation. My major worry is the fact that we cannot refine crude efficiently within the country. Why can we not maintain the infrastructure of this highly important aspect of the Nigerian economy for the benefit of every Nigerian? I am not ignorant of the level of corruption that has made this (and developments in other areas of our economy) impossible but what amazes me is the decision by a government which claims to have a "transformation agenda" to remove fuel subsidy in a bid to harness funds for capital projects.  Is the government seriously thinking on this issue or is it another distraction after it proposed a single six-year tenure for elected president and governors? Or is it a conspiracy to protect vested interests outside the shores of Nigeria? Are there refineries owned by godfathers of Nigeria in other parts of Africa and the world which are being protected by ensuring the ones within the country do not work? Or why can’t that aspect of the industry be opened up to allow private organizations set up and maintain refineries within the nation if the government is incapable of maintaining one? One thing is sure, if the government is sincere in the fight against corrupt elements who are “seemingly” enjoying the proceeds of the fuel subsidy (as acclaimed), the best bet for the government will be to refine the crude here in Nigeria under her watch and regulate prices accordingly. Only after (definitely not before) this can any such plan be reasonably implemented. I seriously doubt whether fuel subsidy will be necessary then. Excess refined products would create export opportunity after many years of importation of the products and this will add to our economic indices. The opportunities in the refining industry are wide and varied: jobs will be created directly and also indirectly through petrochemical extension of the plants and local contracts. More importantly the products will be readily available across the length and breadth of the nation and it will be cheaper than what we are currently paying for them. 

I have witnessed some fuel price increase in my years of growing up and can authoritatively say that the attendant consequence makes the already hard life of the average man even harder. The removal of fuel subsidy will affect every single aspect of every lives in Nigeria: transportation, food, clothing, healthcare, banking, electronics, house/shop rents, construction, education and services (from barbing hair to laundry, furniture making, electrical repairs and pure water sale). The prices will double if not triple (depending on how much the person offering the service decide as the profit margin). I try hard not to imagine this scenario. 

I read about the plan of the government to create safety nets and I’m wondering whether the nets would be wide enough to cover all the aforementioned areas or will they just cover one or two of them. Why on earth will such nets be required in the first place when there are holes in them? There’s no doubt that this is the biggest goof of the millennium by the government, the mere fact that some people reasoned this out shows what kind of trouble we are in. The government laid aside responsibilities of providing adequate electricity - which is necessary to move the nation out of the importing and internal trading economy into the manufacturing and export economy as well as to encourage entrepreneurs, artisans, and generally improve the living conditions of the average Nigerian - in order to pursue this ambitious plan called FSR. The government left the construction of new roads and maintenance of existing ones thereby killing off many Nigerians who lose their lives on the death traps of a road network which we currently ply to chase shadows called FSR. The government left off financing the education sector even when warning strikes by teachers and lecturers are still reverberating within the month of October 2011; when health workers have just resumed back to work in some states of the federation after many months of work stoppages; when many state governments are disagreeing on the payment of the paltry N18,000 minimum wage; when Boko Haram seem to have seized the Nigerian space giving a new twist to the saying “the fear of God is the beginning of wisdom”; when flooding has destroyed many lives and properties in the rainy months of 2011;  to go after a wicked plan called FSR.

It is indeed unfortunate that these are the kinds of decisions the government is able to come up with despite all the challenges facing the nation at this time. The government must decide that the mighty goliaths in the oil sector cannot be bigger than the nation, summon the will and utilize every machinery at its disposal to cut off the head of the leader (which has to be firstly identified and then targeted). It is a known fact that once the leader falls, the army will flee. It is only right to point out that fuel subsidy is not the problem of Nigeria at this point in time and that government should focus on the very important task of tackling corruption starting from within itself i.e. the executives and the legislatives by reducing salaries and allowances as well as scrapping unnecessary job positions. Clearly, many GEJ (and not PDP) apologists are full of regrets at the turn of event but it’s not too late to correct the wrong. Everyone must lend a voice in mounting pressure on the national assembly to reject the plan. The plan must not see the light of day.  

I lend my voice to educate many who may have no clear understanding of the implications of this decision and to expose the ill-conceived ideas behind it.; I lend my voice to support the many other voices which are currently speaking against it; I lend my time to put up constructive arguments to reason this issue. I do hope you can lend yours too now and tomorrow. The ball has been played; it is now in our court...


  1. Mary, GEJ can never do all those things. Fight the goliaths in the oil importation industry, how does he want to do that? Who are the people who financed his elections? Who are the Chieftains of PDP? Why did you think Yar'adua could never arrest Ibori, when his corruption cases were as clear as crystal?
    It is good that you have outlined the real issues, but the government of the day does not have the guts, nor the will to place the fight in the right quarters.
    They are the ones who own the refineries abroad, they are the ones who own the ships that bring refined fuel to our waters, they are the ones who owns the jetties and storage facilities. What they are trying to do now, is just to create excess cash for themselves. N1.2 trillion in the hands of this crop of leaders is lots of loot! Fresh new billionaries and millionaires will emerge suddenly, out of the blues. And Nigerians will have to pay from their pockets to grease the machinery of the importation cartel.
    We Nigerians know what to do, we just do not have the guts to do it. The Tunisians, Egyptians and Libyans have shown the way, but I doubt if we have the guts to follow.....

  2. Thanks J1, it's becoming more and more apparent to a lot more Nigerians what the so-called leaders are up to... no good. Like they say when people have been pushed to the wall and they realize they can't penetrate into the wall, then they either put up a fight or surrender. Let's watch and see how this plays out...Cheers!

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