By Mike Kebonkwu Esq
Nigeria has four refineries. They are managed by the Nigeria National Petroleum Company (NNPC) which is a government subsidiary. All four refineries are moribund. Nobody is sure of the refining or production capacities whether at installation or at any other time it was operational. The workforce of the NNPC is probably a matter of speculation and guess as it is customary with us to recruit ghost workers as part of our workforce. The salary structure is the most attractive with jumbo pay and allowances and good working condition. There seems to be an organized cartel in the oil industry that operates like the Sicilian Mafia that pulls the strings in the petroleum sector. The history of the fuel subsidy is as old as the refineries because the refineries were never able to meet and satisfy our local market and domestic consumption.
The big issue may not actually be whether there is petroleum subsidy or not, but whether it will be right for the poor to pay for official sleaze and corruption in the industry and bad governance. Removing subsidy is a death sentence on the ordinary citizens who cannot navigate out of the minefield of its suffocating cost in their daily life. The NNPC has become a huge bureaucracy of fraud manipulated by the civil servants and chaperoned by the supervising ministry and members of the National Assembly over-sighting the department. The corporation is a gargantuan nest of graft of unimaginable proportion run by cartel that is firmly rooted in government establishment. Nigeria is the second largest producer of crude in Africa after Angola that displaced her from the first position.
The government will be chasing shadow to think that the major problem with the petroleum industry and oiling its bureaucracy is about subsidy removal. The oil industry needs a total and wholesale audit and overhaul in all ramifications; the workforce, production and sale of crude, the regular turn-around maintenance etc. Where does the huge money spent on so-called turn-around-maintenance of the decrepit refineries that have gone comatose go to?
Just like the government bureaucracy itself, the NNPC has become a drain-pipe for siphoning our resources; everything is manipulated from the crude production figure and quantity of imported petrol. Government officials and security agencies supervise the fraud at the high seas selling crude to international criminal network in huge ships and tankers and sharing the proceeds.
Petroleum is the lifeblood of Nigeria. It oxygenates the economy. Availability and cost of petrol determine what happens in other critical sectors and chains of production of goods and services in the country. It goes down the line without exception affecting every household, students, farmers, market women and small and medium scale enterprises. The masses have always been at the receiving end as the government is fixated on oil as the single revenue yielding resource to finance every other thing including the insatiable appetite of the cartel behind the oil industry.
Government all over the world find a way to provide social services by subsidizing critical areas in agriculture and food production and even gasoline supply including in Europe and America. The government kept talking about the humongous amount spent as subsidy on petroleum but we are not told the people who receive the payment and evidence of delivery of products is shrouded in official secrecy. Will it not be easier to identify and deal with the cartel than to put such a heavy burden on the poor and indigent citizens? Removing subsidy is to levy citizens for the corruption in the civil service, failure of the security agencies and cost of governance.
While still coming to terms with the inauguration of President Bola Ahmed Tinubu as the 16th President of the Federal Republic, the nation was struck with a bolt from the blue: the removal of subsidy. The new sheriff in town is not a stranger to the socio-economic and political temperature of the country. He is a hard-nosed politician and strategist with uncommon boldness and courage.
During his inaugural speech, President Bola Ahmed Tinubu mentioned very casually but emphatically that the subsidy regime is unsustainable and not contained in the Budget of 2023, and so the subsidy is gone. Just like that! The cadence was magisterial as well as imperial. The announcement was bold, courageous but insensitive; insensitive because there are no palliatives put in place to assuage the harsh and sudden removal. Demand for salary increment as one of the measures is balderdash because the economy cannot even sustain that at the moment. Furthermore, how many Nigerians earn salary from the government?
The President appears very prepared for his job though; he has a measured approach and his orders are strident, loud and clear. First, he ordered the DSS to vacate EFCC’s office in what appeared the usual inter-agency rivalry that characterised Muhammadu Buhari’s administration involving agencies of government working at cross purposes and struggling for media attention rather than do their job professionally. He also did not miss it when ordering the security chiefs to deal with insecurity, petrol thieves and other felons.
When the subsidy was in place, it did not as much benefit the masses and it is not expected that the removal is going to translate to a better economic condition for the ordinary citizens. If anything, the economic condition of Nigerians is going to be worse off because of the multiplier effects on goods and services. Operating within the same income bracket and economy in recession, the pain is already being felt by everyone that movement from one point to the other has become unbearable burden.
Moving forward, it would be ennobling for the government to reverse itself on the subsidy removal and deal decisively with the core problems which are at the root of the fraud and heist in the oil industry. First, fix the refineries; audit the NNPC workforce, overhaul the security architecture responsible for overseeing movement of goods and services in the oil industry and make examples with people without pretentions. The cost of governance in Nigeria is outrageous; it has to be pruned down especially maintaining two Legislative Chambers accommodating gerontocratic politicians retiring from the states who have turned the National Assembly to old peoples’ home. The cartel supervising the sleaze in the oil industry should be identified and appropriately dealt with without sentiment.
Importation should only be an interim and short term measure. We cannot depend on foreign conglomerates to come and harvest our rich resources with their advance technologies and leave our land desolate. The NNPC and its refineries are not able to engage in production but government is busy destroying so-called illegal refineries by our ingenious industrious youths with local technology, instead of getting them together to improve on the local home-made technology and improve or increase production of petroleum products. This is what made the Asian Tigers to be where they are today technologically. The government should be ready to bring all the profiteers to book and then set a new standard and ways of doing business right instead of making citizens scapegoats. Head or tail, the masses will continue to bear the brunt as the end users of gasoline in mass movement whether it is to take our wares to the market or to bring them from the farms or to commute to work place.
Our western trained scholars, intellectual merchants and economists always see the growth of an economy from wholesale borrowing and foreign loans, just the same way our indolent political class feel that we should sell all asserts to private individuals and foreign investors and enjoy immediate pleasure and overseas trips. The organized labour may not be able to face the behemoth which the present government appears to represent; there will be a heavy crackdown of protesters. The country has taken a coloration of rabid tribalism and ethnicity and it is increasing in perception index of everything done in government.
Since 2015, the country has been lying prostrate on a sick bed. It got worse in the build up to the elections including the asphyxiating economic measure of Naira redesign that turned out to be political weapon draining everyone. Being sick in hospital before taking a jab, the nurse or medics would first apply mentholated spirit on the spot to ensure that the needle does not carry infection. On subsidy removal, nothing, absolutely nothing can assuage the laceration of the removal. It is better to kill corruption in the oil industry than pass a death sentence on the masses through subsidy removal; it is better to expose and shame the cartel behind the subsidy than asphyxiate the common man by subjecting him to unbearable petroleum tax which is what the subsidy removal stands for. The government should take a second look at the whole business and politics of subsidy; the masses deserve a better deal.
The author is of the Koyen-Hi Kebonkwu Chambers, Wuse Zone 5, Abuja – Nigeria and is reachable via email@example.com