Buhari And Oil Sector Liberalisation: What Kachikwu Has Not Told Us?

By Ifeanyi Izeze

Whether they called it “subsidy removal,” at first and later “price modulation” and now “downstream liberalisation,” one fact stands out that the announcement by the federal government on the fuel issue represented a form of deregulation of the petroleum products procurement and distribution sub-sector of the nation’s downstream. Most Nigerians as it stands today are seriously praying and hoping that President Muhammadu Buhari and his team will arrive and quickly too at a reasonable strategy to take the nation through the next couple of years and position us for the long term as well. This is our hope and according to the Holy Bible (Romans 5:5), “Hope does not make us ashamed”- we cannot be ashamed of having hope on the abilities of our crop of ‘ogas on top.’ And our prayer is that our president fulfils the hope of his calling by being fruitful in every good work.

It is an understatement to say that there is a lot of confusion that need to be cleared and in plain language too by the government in the announced liberalisation of the petroleum products procurement and distribution sub-sector.

Truly Nigeria is “fantastically wonderful,” if not how do you explain the existing foreign exchange (forex) discrepancies between the Central Bank rate and those of the autonomous or rather black markets? As at today black market foreign exchange rates are well over two times the official rate. The first question is: who supplies forex to the black market operators? Is it possible that someone can smuggle huge amount of dollars into Nigeria without beign detected? It is obvious that those in authority- in government, CBN and the NNPC are the ones releasing forex to their cronies/fronts that operate the black markets. Is this in its self not corruption/fraud at its highest order?

This government that has shown a strong political will to fight corruption should address this foreign exchange discrepancy that is at best sabotaging the genuine efforts to re-jig and strengthen our economy. You expect marketers to source forex at the secondary/ black market and at the same time cap the price they are expected to sell their commodity, is that going to work?

Though it is better to believe it was an oversight, remarkably, the president and the petroleum minister have been mute on the fate of one of the worst epicentres of corruption in the fuel subsidy and price modulation fraud in this country. The Petroleum Equalisation Fund (PEF), a conscription that is as fraudulent as the entire subsidy racket is being completely left out of the present argument by both the government and those against the recently announced deregulation of the downstream.

It is “fantastically corrupt” to be mute on the issue of equalisation as enshrined in the Act that established The Petroleum Equalisation Fund. This Fund was supposed to make sure every Nigerian, no matter where you live, pay the same price for at least petrol and kerosene. And money has been channelled through it all these years to majorly offset haulage costs to different parts of the country. Unfortunately, the haulage cartel is as corrupt, mindless, and selfish as the fake fuel importers themselves. But for whatever reasons, their fraud and activities had been deliberately played down by both government and anti-subsidy campaigners.

Has the obnoxious payment of the “Bridging Cost”, also been scrapped by the federal government as part of the recently announced deregulation/subsidy removal and cost saving initiative?