The reported plan by the Federal Government to raise the price of fuel, although not clearly stated but certainly implied in the revised 2015-2017 Medium Term Expenditure Framework (MTEF), is not acceptable to Nigerians and it should not be effected.
The story is that, as the international price of crude oil falls and alters the $78 benchmark on which the 2015 national budget is based, government has reduced the benchmark to $73. In turn, the N971.14 billion set aside for fuel subsidy has been cut in the proposed MTEF by nearly 50 per cent to N458.68 billion. This being so, it is not unreasonable to extrapolate that Nigerians may in the New Year, have to pay more for premium motor spirit (pms) than the current N97, depending on where it is purchased in the country. But the question must be asked: are Nigerians not suffering enough and why would a Government consider adding to their heavy burden?
It is trite to state the very obvious multiplier effects of an increase in the price of fuel, be it petrol, diesel, or kerosene. But it bears restating the wide-ranging negative implications that seem perpetually, incorrigibly lost on Nigeria’s policy makers. An increase in the price of fuel will directly push up the prices of goods and services. The cost of transportation will rise and in turn, affect the cost of food and, of course, the cost of running the home generating sets and the office power generating equipment. These are just some of the economic effects that will immediately manifest. The social effect – and implication – is even more serious.
The 2012 protest against a similarly oppressive policy comes to mind: Lagos, the most important centre of wealth generation in the country was literally shut down for days as people resisted a price hike that needed not be were the managers of the country’s affairs alive to their duties and their constitutional responsibility for the welfare of the citizens. Even when there are no protests, financial cost of fuel queues to personal, corporate, and ultimately national economies is enormous. The fuel subsidy claim by government remains at best suspect and dubious. Several ‘investigations’ into the perennial transaction and the true cost to the public treasury are yet to be clarified to the satisfaction of all Nigerians. Indeed, not only is the murky fuel subsidy affair a cesspool of corruption, it has been structured into an evil system that ensnares even the investigators. In sum, Nigeria and its people are victims of a huge scam in the name of fuel subsidy. This explains why investigations into the transactions are either not conclusive or where conclusive, are not acted upon.
As every patriot knows, oil-producing Nigeria has absolutely no business importing petroleum products; indeed Nigeria is the only – and aberrant – country within the Organisation of Petroleum Exporting Countries (OPEC) with the tragic destination of exporting crude only to import refined products at a premium. It is a badge of dishonour. The aberration is even more glaring and indefensible now that Nigeria presides over the OPEC.
At the risk of repeating the obvious and simple approach to a simple matter, the Nigerian government must ‘think outside the box’ to adopt a holistic solution to the demand and supply of petroleum products. Government must do all within its powers to make the existing refineries work at the optimum, build additional refineries to ensure that local production meets – and exceeds – local demand and make Nigeria an exporter of not only crude oil, but of petroleum products too. Needless to say, the multiplier effects of efficiently and optimally operated refineries are broad and include the conservation of foreign exchange, raw materials for plastic and other manufacturing concerns, more jobs, skill acquisition opportunities. It makes common sense for our country to get out of an insidious fuel supply cycle. But for a start, there must be no increase in the price of fuel.
