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Suddenly, Nigerians have been made to believe a lie. They have been brainwashed into believing that subsidizing a product or service is evil. Not true. Subsidy is part of common good done to the people by governments. In some parts of Africa, the Arab world, Asia, Europe, the Americas, products and services are subsidized for the good of the people. Food, public transport services, healthcare, even oil and gas products, are subsidized from one jurisdiction to another. This defeats government argument that removing subsidy on petroleum products, especially petrol, is the joker card to reflating a sufficiently sagged and badly battered Nigeria economy.
Petrol subsidy dates back to the 1970s. Even with refineries built by the Olusegun Obasanjo military government in full production, the products were still subsidized and Nigerians were the happier for it. The difference between then and now is not because subsidy is no longer a good deed. The difference is corruption. In the beginning of petrol subsidy, corruption was zilch. The process was open, void of over-invoicing and allied fraud. Petrol subsidy only became a sordid sore in Nigeria because corruption was introduced into the process. Kill the corruption, keep the subsidy and we’ll still have a grand economy as of old.
Unfortunately, no Nigerian leader in recent history has summoned the moral strength and political will to arrest the bogey of corruption chipping away the tensile fabrics of the subsidy initiative. Olusegun Obasanjo, Umaru Yar’Adua, Goodluck Jonathan, Muhammadu Buhari and the now Bola Ahmed Tinubu have continued to overlook the corruption component of the subsidy imbroglio. It amounts to unreason to continue to mouth subsidy removal without addressing the inherent fraud in the subsidy chain.
All the leaders, bar none, have admitted that subsidy favours only a tiny clique of the elite. The bare explanation is that subsidy is riddled with corruption that profits just a few Nigerians and their foreign collaborators. There is, therefore, nothing wrong with subsidizing a product or service. What is wrong and immoral is knowing that the process has been corrupted and doing nothing about it.
President Tinubu in his latest broadcast acknowledged that “subsidy cost us trillions of Naira yearly. Such a vast sum of money would have been better spent on public transportation, healthcare, schools, housing and even national security. Instead, it was being funnelled into the deep pockets and lavish bank accounts of a select group of individuals.”
Great observation by the President. But he should tell Nigerians how he will retrieve the stolen trillions of naira from this ‘select group of individuals.’ In case Tinubu still doubts the stench of corruption in the subsidy marketplace, let’s rewind to what former CBN Governor, Sanusi Lamido Sanusi, said at a TedX Youth forum on August 18, 2013. It’s a classic tale of corruption on props.
Hear Sanusi: “Let’s take the oil industry and talk about fuel subsidy. In 2009, Nigeria paid N291billion as subsidy for petroleum products. By 2011, the number had jumped to N2.7trillion. Did we start consuming 10 times as many petrol or having 10 times as many cars or 10 times the population?
“I didn’t believe these numbers and a number of people screamed and because we tried to remove subsidy, there was Occupy Nigeria protest. There have been investigations and we discovered that a lot of that money never went into fuel subsidy that was consumed by Nigerians.
“There were people in this country that produced pieces of paper and brought it to Petroleum Pricing Regulatory Agency (PPRA) and somebody signed those papers and said they brought in petroleum products, and actually paid them subsidy because the paper said they brought in 3000 metric tonnes of petroleum products on a particular ship and we discovered that, that ship was nowhere near the coast of Nigeria on that date.
“We have seen vessels that did not even exist that had been retired on bills of laden and monies had been paid, and none of these people have gone to jail. This is the only country in the world where you have oil theft, where vessels can simply come and take crude oil and literally just sail out of the country. How can anyone just take oil from a country and leave, when we have the Navy, NIMASA, security services of the oil companies themselves and every day we complain about lack of development?”
Vintage Sanusi: Courageous and blunt. And here is the crux of the crude tale. It’s not about removing subsidy when your refineries are comatose. Any Nigerian who believes that prices of petrol will dip in a matter of weeks or months is living in dreamland. Not even the much-hyped Dangote refinery will bring prices down for as long as there is a Federal Government content in that gigantic refinery project.
Tinubu should ponder these: As at last year, Nigeria was spending N18.397 billion daily on oil subsidy. In 7 months of 2022, NNPC did not remit a dime to Federation Account, subsidy wiped out all money realized from crude oil sales. Kaduna refinery gulped ₦62 billion in 13 months as operating deficit. Warri refinery gulped ₦42.1 billion as operating cost for zero production in one year. Port Harcourt refineries gulped ₦43.8 billion for zero production in one year. Port Harcourt and Kaduna refineries recorded a combined loss of ₦208.6 billion in 2014; ₦252.8 billion in 2015; ₦290.6 billion in 2016; ₦412 billion in 2017, and ₦475 billion in 2018.
Again this: the $26.5 billion so far spent on maintenance of the 445, 000 barrels/day capacity refineries is enough to build three new refineries of same capacity. These statistics are from NNPC Limited. They simply underscore the rot in the system.
This is the real meaning of lunatics taking over the asylum. It can’t get any worse. To think that on top of this mess, 80% of our crude is stolen between the point of production and the point of discharge (sale). Obviously, the Nigerian leadership elite including the military has turned oil and gas sector to their personal farms, a high-paying ATM. This is what Tinubu should address. Probe the activities of NNPC Limited in the last decade; retrieve all the money stolen through a duplicitous subsidy arrangement and prosecute the elite crooks. This is the expectation of Nigerians. Tinubu should sell off the moribund, money-guzzling refineries. But if he insists on fixing the outdated refineries, he must first recover all the funds dubiously credited to the ritual called Turn Around Maintenance (TAM). But nothing stops Nigeria from owning refineries. The Egyptian General Petroleum Corporation (EGPC), the national oil company of Egypt, owns no fewer than six refineries through which petroleum products are subsidized for the people.
ARAMCO is a Saudi Arabian public petroleum and natural gas company and one of the most profitable companies in the world. The difference between these two public-owned companies and NNPC Limited is corruption. Take away corruption, Nigeria has the technical competence to own and run profitable refineries. Tinubu should fix graft in the system. Removing subsidy on petrol is asking Nigerians to atone for the levity of a thieving elite few. Injustice!
