If the Federal Government succeeds in convincing Nigerians, then from next January, a litre of premium motor spirit, otherwise known as petrol, may sell at N150. The current price is N65. As part of the policies that will drive next year’s fiscal budget, government is planning to remove so-called fuel subsidy. The jump in price is over 113 per cent. As usual, the hike will in turn have a ripple effect on all aspects of the economy. Thus Nigerians will be welcomed into 2012 with skyrocketing prices of all manner of goods. That such a scenario should not happen is why organised labour has, since the proposed move became public knowledge, vowed to stop government in its tracks. Many labour leaders argue that government is only trying to reclaim through the back door the N18,000 minimum wage it recently agreed to pay to the least paid employee.
The politics of fuel subsidy has been with us for a while. While those in government argue that ordinary people are being shortchanged through fuel subsidy because they do not get any direct benefit from same, the citizenry point out that they should enjoy cheap fuel prices because crude oil from which it is refined is a national resource. Unfortunately, the nation’s poor refining capacity is at the centre of the whole drama. The nation has four refineries, which for many years have performed in fits and starts. Those who should know allege that saboteurs have almost permanently been at work. For instance, since its completion over two decades ago, it is doubtful whether the Kaduna Refinery has ever worked consistently for more than two months without a break in production. And periodically the turnaround maintenance of the Port Harcourt and Warri refineries guzzle hundreds of millions of dollars. Yet, they are never in peak form. That, in effect, is what has turned an oil-producing nation into an importer of refined products.
Some of the refineries outside the shores of this country from where we import fuel are partly owned by highly placed Nigerians. In the twilight of the President Olusegun Obasanjo administration, government decided to sell the nation’s refineries. The plan was that if the refineries were run by the private sector, the era of fuel importation would end. No sooner did Obasanjo leave than a campaign began that a national heirloom had been given away. The Nigerian National Petroleum Corporation under whose purview the refineries had performed woefully vowed that it would make them work within six months. The government refunded the $750 million the Blue Star Consortium paid for the refineries. Hundreds of millions of dollars were further pumped into reviving them. Yet it is the same old story.
In any normal clime, the scandal that our oil refineries have become is enough to prosecute those officials who are responsible. Now we have been told that government would save as much as N1.2 trillion a year if it ends the regime of fuel subsidy. This savings from fuel subsidy removal, it explained or promised will further be plowed into developing infrastructure. The sad fact, however, is that we have heard the same broken record before. In 2000 when pump price of fuel moved from N20 to N30 per litre that was the excuse given. Thus, Jonathan is going to have a hard time convincing Nigerians that this time the promise is for real, especially because his Peoples Democratic Party has been in power since 1999 and we have almost nothing to show for it.