Deregulation: Same Policy, Same Issues, But Different Politics!

By Reuben Abati

This thing called democracy, particularly the Nigerian brand, never ceases to throw up new and intriguing lessons about the relationship between government and the people, and the larger, complex socio-political environment. I had gone to Lagos on an assignment in the last two days of the year 2011, when around midnight I received a phone call from someone close to the corridors of power, informing me that a meeting had just been concluded in Abuja where a decision had been taken to deregulate the downstream petroleum sector, and thus, in effect remove the subsidy on Premium Motor Spirit (Petrol).

*Reuben Abati 

I told him I was aware of plans to that effect, since the President had been holding a series of meetings with various stakeholders and constituencies on the same subject, but as at the time I left for Lagos, no final decision had been taken. The fellow insisted he knew what he was talking about and that in the morning, the Petroleum Products Pricing Regulation Agency (PPPRA) would make the announcement. Sometimes in the corridors of power, informal stakeholders could enjoy faster access and be even more powerful than persons with formal responsibilities. There are persons and groups whose livelihoods are so dependent on government and the people in power that even a whisper at the highest level resonates immediately as an echo in their ears. I learnt very early never to underestimate such persons.

As it turned out, Nigerians were greeted with the Happy New Year news of deregulation of the downstream sector on January 1, 2012 and if you’d remember, hell broke loose. It was the end of the Nigerian people’s honeymoon with the Jonathan administration, the beginning of a long nightmare, and an opportunity for the opposition to launch an unending campaign of blackmail, name-calling and abuse against the administration. I received an early morning summon to leave Lagos and return immediately to the Villa.

The Jonathan administration was definitely not the first to seek to deregulate the downstream sector and end a regime of subsidy, as a means of ensuring greater transparency, efficiency and competition. Since 1987, every administration had tried to manage this aspect of the curse of oil. Nigeria is the sixth largest producer of oil in OPEC, and the second largest exporter of the product in Africa, at a time after Libya, at other times, after Angola. But the big problem has always been making the product available to Nigerians at home, in an efficient manner and as they say, at an “appropriate” or “correct” price. The mismanagement of oil resource, which accounts for about 90% of the country’s exports, is at the heart of corruption in Nigeria.