A dangerous feuding evocative of the framing of the oil commodity as the prize by Prof Daniel Yergin, the American Energy intellectual in his all time best seller – The Prize: The Epic Quest for Oil, Money and Power is raging in Nigeria notwithstanding the fear of leaving a huge population of about 200 million to the vagaries of the uncertainty embodied by such feuding within the government about oil – the artery of national life in Nigeria. Locked into the feud which no one appears talking about in Abuja are all the primary stakeholders, beginning with the president an Nigeria’s Oil Minister, the Vice-President, the Minister of State for Petroleum, the Group Managing Director of the octopus called the Nigerian National Petroleum Corporation, (NNPC) and the Depot and Petroleum Products Marketers Association (DAPPMA). The linguistic war with no clear winner in sight is making it all seem no longer farfetched why there is a logjam in fuel delivery in the past few weeks across Nigeria and why the situation might degenerate if care is not taken. All the stakeholders are not sure anymore which is which as far as administering the oil commodity is concerned.
The NNPC re-opened this feuding recently by talking about a N26 or so worth of subsidy on petrol. The Vice-President, Prof Yemi Osinbajo said there is no such thing, that whatever exists by such name does so as a technicality in NNPC business operations. It was consistent with his idea that ‘they’ had persuaded Buhari to accept neoliberalism, a feat which a subsidy regime would compromise because the neoliberal spirit is hostile to any such thing as subsidy. ‘They” persuaded Buhari when the president was still agonising, craving to be educated about neoliberal economics and how he could accommodate the economists. By economists, he could be taken to mean neo-liberals pushing their option.
It is possible that when the president said he was still agonising, he was making a PR statement, a gimmick, an exercise in presidential self-writing. But that is if the Vice-President did not come out to say that ‘they’ had to persuade the president to accept the policy orientation. Who were or are the ‘they’ in question? That is not to say that the Vice-President wasn’t consciously representing the president as still a statist which he was, a good PR because it is still a terrible image to be seen as a neoliberal in Nigeria, not minding that many people do not even understand what neoliberalism means.
As such, majority of Nigerians would see the on-going feuding as no more than another of the numerous protocol breaches in the conduct of government business under President Buhari’s second time in power. This did not happen because NNPC GMD came up to say that there is, indeed, an oil subsidy regime based on presidential seal to that effect. Since he was speaking after the Vice-President, then a correctional intent can be suspected even if the original or truer reason that drove him was the imperative for any dosage of populism that could help a Presidency staggering from the fuel crisis. In any case, he was speaking to a well chosen set of journalists – those who cover the seat of power and should usually be some of the most sensitive, balanced and stable stock of reporters in the country.
So, which is which? Is there a subsidy regime in disguise, propped up by elements in government that have residual resistance to neoliberalism or there is nothing like that? Assuming there is a correct inference, which side is likely to win? How concerned is each camp about the plausible implications of what they might be up to, especially in the context of the emerging global context?
Nigeria has little or no leverage about how the world oil market works. The global oil market has moved. It is no longer the United States using her global leverage since 1945 to arrange the world oil market in its own image. It is now the existence of multiple centres of global powers, each with sufficient capability to impose their own wills on the world market even when such temptation to unilateralism hurts any or each of them that does so. The expected geopolitical gain from such unilateralism would compensate whatever harms which they are better equipped to cope with anyway.
Well situated energy journalists such as Irina Slav got it completely right, for instance, when they speculated last November that Russia was going to determine extension or no extension of existing cuts, not Saudi Arabia, not any other fellow Gulf producer or Venezuela but “Russia, and more specifically President Putin, who suggested such an extension during Saudi King Salman’s visit to Russia in October”. Then she went on to list the different ways Putin is reckoned with in global oil politics today: the man “calling all the shots”, according to an OPEC source; “the world’s energy czar” as far as Helima Croft, the Head of Commodities at the investment bank, RBC Capital Markets is concerned. But wait for it: she named Russia and the US shale market as the new game changers, meaning the ouster of Saudi Arabia, two developments which OPEC missed in terms of how both Putin/Russia and the US shale market effected the oil market coup.
The journalist was not exaggerating the power of Putin. For a man who made the Russian presidency, depending on which texts you are reading, because he impressed Boris Yeltsin with his thesis on how oil could be used for national greatness, there is something to watch in Putin as far as game changing chess moves is concerned at a fluid time such as today. Nigeria would not be a reason in such deployment of oil power for national greatness or, more precisely, global primacy by Putin but Nigeria would be one of those that suffer it most should Russia take an action today that either shoots up oil prices astronomically or brings it crashing disastrously. Such would be a messy reality and the eve of turmoil in a country like Nigeria which has almost no refineries and could leave the average Nigerian unable to pay even one-tenth of the price of imported fuel. If there is no subsidy regime in Nigeria, what happens should any global energy powers make such a move as the US did in 2003 over Iraq? This is besides other embarrassing shortcomings of the Nigerian oil sector that speaks to a sector being mismanaged by politically ill-educated operators relative to what others have done with oil.
The puzzle, in the view of critical observers, is why the president appears trapped, notwithstanding his background knowledge of the oil sector? What might have happened to whatever reflections he did while he was in the political wilderness, far away from power between 1998 and 2015? As some insider-outsiders recently asked, would President Buhari insist that he has been sufficiently aggressive and substantial in his economic diversification campaign when agriculture is still not the ‘core’ of the Nigerian economy, three years into his tenure? As critics are also asking, can he see any other strategy of achieving national unity in Nigeria other than agriculture?
But, assuming that the interpretation of the verbal inferno around subsidy as a conflict between residual statists and neoliberals is a correct analysis, what does anyone make of the one between DAPPMA and the NNPC? NNPC came up with the argument that DAPPMA members caused the current fuel crisis through hoarding. DAPPMA responded by saying the crisis has nothing to do with hoarding but NNPC’s assumption of the sole importer of the essence. NNPC did not directly dispute that but wondered how DAPPMA whose members were indebted to it to the tune of N2.6billion could open its mouth so wide. DAPPMA sent another missile: “Marketers have continued to sacrifice to keep the country wet with fuel, despite over N600 billion debts owed our members and over N800 billion owed marketers as a whole”. NNPC has yet to respond.