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?
We all remember a recent campaign by
those pretending to defend the interests of Nigerians in some parts of the
country that if the Equalisation Fund is scrapped, Nigerians in those areas
would be made to pay four-five times higher prices than price regimes in areas
closer to the depot facilities because of the distance it takes to transport
the petroleum products from coastal depot facilities into the hinterland. In a regime of no subsidy, does the
government still expect petrol to sell at the same price in Maiduguri ,
Makurdi and Lagos
or Brass?
To everybody, the argument actually
made sense but Nigerians were unaware they were being manipulated by the
haulage cartel whose only interest is themselves. Even in the coastal areas
that host refineries and/or depot facilities, does fuel sell at the same price
everywhere? Not at all! But because we like to play politics with everything,
sectional, regional and even ethnic colourations were introduced to deceive the
innocent Nigerians for the selfish interests of a very few businessmen.
If this government is still
retaining that fund, it means then that they are subsidizing fuel in certain
sections of the country while leaving out others to the mercy of the oil
marketers. The Petroleum Minister needs to clarify this issue without ambiguity.
Now, whether anybody wants to hear this
or not, our refineries are still comatose. The combined performance outings for
the three and a half plants we have in this country are nowhere near 30 percent
utilisation of installed capacities not minding all the deceit by the NNPC and
its people in government. Even the ordinary boiling of crude oil to separate
petrol (PMS) and/or diesel, none of the refineries- Warri, Kaduna ,
Port Harcourt I
and II is doing that effectively to anything near 40 percent capacity as
installed. Meanwhile, this is just a very tiny fraction of what the refineries
were set up to do in the first instance.
It has been severally said that
years of mismanagement and corruption not only in our oil sector but in all
facets of our economy as a nation has produced a Nigeria that does not (as at now)
have the capacity to refine crude oil into petrol and other products for her
domestic needs.
Just last week, we were told that
the federal government would set a deadline for the country to be
self-sufficient in refined petroleum products and become a net exporter of
same. Good as it sounded, the Government need to be very clear on what they
mean and also be honest sincere enough to set realistic and achievable
deadline. The government has not told us the magic it’s going to do to achieve
that in the short term and even in the long term as we glaringly know that our
petroleum minister “is not a magician.” We need to be “carried along.”
All kinds of talks have been
dangling around on the decision to privatise/sell the existing refineries;
establish co-location plants near the existing sites to process crude; private
involvement in crude oil refining through the modular concept; and so on. In
all these contemplations, my advice is that the government must critically
consider the issue of availability of crude oil feedstock supplies to the
proposed ventures. Of what use is a refinery whether full plant or modular
sited somewhere but cannot receive crude oil to process? So whatever has been
the cause of disruptions and vandalisations of lines from the sources of the
crude to where they are expected to be processed should be addressed without politics
because ‘I
no gree na im dey tear shirt o!’ There is a way you ask somebody to go to
hell that he actually decides to go there and see what will happen. A
word don do for the wise o!
*Ifeanyi Izeze lives in Abuja and can be reached
on: iizeze@yahoo.com;
234-8033043009)
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