The Truth about Petrol Pricing & President Buhari/

Much has been said and much has been written on the “about-face” recently made by the Federal Government on pricing policy for PMS popularly known as Petrol. For ages, Nigerians have come to accept it as a birthright to have cheap petrol riding on the back of being one of the largest producers of crude oil in Africa.

In Nigeria, petrol sold for half the price of its neighbors – smuggling flourished, even as government doled out funds that should go into infrastructure and producing refined petroleum into importing and supporting jobs elsewhere while Nigeria’s unemployment grew, infrastructure decayed and balance of trade went negative.

Despite its large size and growing population, and the idiocy of subsidizing consumption instead of production (breeding Dutch disease), Nigeria’s vocal union and activist class, kleptomaniac petroleum money bags and classless politicians have an unusual but unholy third rail alliance that forswears market pricing of a product the country hardly produced any quantity of.

In 1980, and about one-third of today’s population, Nigeria processed close to half a million barrels of crude oil and had enough refined petroleum to export. Fast forward thirty years later, and we have 170 million people and process about…zero. It was at this juncture that her citizens blessed her with the most unpatriotic, venal and kleptomaniac Goodluck Ebele Jonathan (GEJ) administration who then went about not only frittering the common enterprise but ensuring the country became hooked on importing what she did not have while shielding the citizens from the consequences of this misnomer.

Granted, GEJ tried to remove the subsidy, but the citizens also wisely knew that the thieves that reigned supreme in that administration would liberally steal whatever savings was made, as they did in right order even with the little left over as we now know; and even stole from widows, orphans and kidnapped teenagers when Abacha loot was returned to them and adroitly stolen to prosecute an election campaign! So the battle of 2010 was not so much about if removing subsidy was right, but a cold calculation by citizens that their government cannot be trusted with any savings made; given its sticky finger nature.

Much ado is now being made by the decision of the President  to face up to reality, but one thing the adducers of why the price of PMS should not be priced like kerosene, diesel, and water (or even bread, shelter and clothing which are basic necessities of life) is that this decision impacts the very poor. On this count they’re wrong. Latest data suggests that Nigerians paid an average price of 137 naira in March, and 150 naira in April. The highest selling price was 167 naira per liter in Nassarawa and Borno despite its security problems had the lowest at 87 naira but your guess is as good as mine on availability.

So if anything, the new policy is saving the poor. The government is refusing to fund the lifestyles of the criminal elites that are involved in importation and petroleum distribution – who benefitted from round tripping, cross-border smuggling and subsidy payments while selling at erstwhile approved pump prices. Now we have a government in place we can trust, and albeit previous stances against reversal, we must support this painful but inevitable policy to stop funding inefficiency and corruption. Indeed, Subsidy was never in 2015 and 2016 budget and unless we subscribe to breaking the law, starting to pay one now is illegal.

Some others have indicated it is a birthright for Nigerians to enjoy PMS, but fail to tell us we hardly produce any. We can’t use crude oil to fuel our cars, and our government should not be in the business of refining because we lack the fundamental patriotism to sustain such effort as has been proven over the decades. The indirect subsidy of underselling the national FOREX revenue causing states to owe workers wages was also a real problem- and here lies the real subsidy as international crude oil prices collapsed, and Nigeria couldn’t meet the demand of importation. In any case, why use our hard earned foreign exchange to fund the bourgeoisie elites with multiple cars in their fleet and the rampant waste of the Nigerian? We should subsidize production not consumption!

It is time for us to put money where it matters: infrastructure, health, and education. You said you want to see results first? Well those cost money. Where half of monthly national income will be used to import petrol and subsidize jobs in foreign economies, it is simply not an option. And don't talk about fixing refineries: this takes time (and the private Sector) and ensuring avengers stop blowing up repeatedly fixed pipelines. If you want to wait 3 years to build new refineries to remove the subsidy - FOREX and direct- then we will be bankrupt by then and having nothing to show for it

Beyond deregulating to save our scarce FOREX and enable the government meet its basic obligation of paying wage of public workers and providing security, we must also do the other hard things. Public officers must downsize their convoys and retinues; travel and fleets of private jets must go even as the government must lead by example. This is the only way the very poor will realize that the pain and gains will be shared.

Indeed, as a follow-up specifically to this energy policy of deregulation (this is what it is, when market set prices despite the avoidance of that politically volatile term), we must engage the oil and gas host communities and especially pass the petroleum industry bill that has a lot of good things in there for them while promoting inward flow of investments needed for reviving our refineries that will bring prices down and reduce the pain. Certainly, we must also take the hard pill of correctly structuring our monetary policy by stopping the deliberate sales of cheap hard earned dollars to any player- public or private, reform the civil service to reduce the burden of public policy executors, and create social safety nets for the very poor. We need to chew gum and walk the same time, not pussyfooting around the problem.

Time to tighten our belts Nigerians, and get to serious nation building instead of phantom economics of the PDP era. #Changeishere

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