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Subsidy, by the dictionary, is a sum of money granted by the state or a public body to help an industry or business keep the price of a commodity or service low. The objective of subsidy is to bolster the welfare of the society. Any purported subsidy paid by any government not channelled towards the welfare of the people is not subsidy, it’s a cog in the wheel of the welfare of society. Nigeria as a country is broke and is in need itself to be subsidised. It has become one of the poorest countries in the world under President Buhari that for the first time in our history, our revenue is not enough to service our debts. It will be ridiculous to expect a poor, malnourished country to be paying subsidy to subsidise a product which it’s producing because one cannot give what one doesn’t have.
Crude petroleum oil was found in Nigeria as far back as 1958, before the independence of Nigeria. Instantly, Nigeria became the largest producer of oil in Africa and one of the largest producers in the world. In the 1970s, money from exportation of crude oil was so much that Gowon publicly declared that money was not the problem of Nigeria but how to spend it. As if demons heard him say that, they descended on Nigeria and possessed our leaders and started teaching them how to spend it. Our leaders refused, failed and neglected to invest in productive ventures that will usher in the industrialisation of the society and create employment for the youths, but rather embarked on frivolous spending on consumable goods imported from all over the world. It’s disgraceful that they could not even invest in the oil industry, which is the goose that lays the golden eggs. From building of four refineries in the 70s, the successive governments of Nigeria, continued spending Nigeria money, without replenishment and without savings, until the fortunes of the oil industry started winding down. From four refineries down to three, down to two and down to one and yet again down to none. The sadest part is that money was appropriated every year for the turn around maintenance of these refineries but the money was continually being stolen by corrupt leaders without accountability.
This sorry state led to the complete importation of all the refined products needed to power our economy with the attendant consequence that the price per litre of the refined premium motor spirit (pms) became unaffordable by the ordinary citizen of Nigeria. The process of the refined crude starts with the excavation of the crude, the exportation of the crude to foreign countries for refining, to the re-importation of the same refined oil back to Nigeria for the average Nigerian to pay for the highly priced imported pms. The unnecessary added cost, which would have been unnecessary, if the crude oil is refined in Nigeria, include the cost of shipping the crude abroad, the cost of refining the crude abroad, the cost of shipping the crude back to Nigeria, all the handling and packaging costs of the international transportation of our oil. The unfortunate thing is that all these costs are transferred to Nigerians to bear as pump price of the product.
Coupled with the depreciation of the naira, the price of the commodity, per naira keeps rising every day. The only choice the successive corrupt regime had was to be subsidising the pms just to make it affordable to the citizens in order to sustain the economy. The interest of the corrupt elite in the subsidy regime was also entrenched because they use the opportunity to inflate the prices of the commodity artificially in order to have a greater margin of illicit profit for themselves. They also inflate the quantity of the totality of the oil consumed in Nigeria so that money will be earmarked for non-existent, imaginary quantity of oil consumed, for the squandering pleasure of the oil subsidy criminal syndicate.
Being meshed in cesspit of corruption, Nigerians realised that they were being used as excuse by the corrupt syndicate to siphon illicit money from the general purse. It is this syndicate that pressurises the government to continue paying the subsidy and blackmails the government whenever the government threatens not to. It’s this syndicate that ensures by their crooked ways that the oil refineries do not work. When Nigerians realised that their lives are not bettered by the payment of the subsidy, as the money that ought to be spent on education, health care, power, roads, railways, mechanisation of agriculture etc, was now spent on the payment of the purported oil subsidy, they started gradually rejecting the idea of the subsidy. There appeared to be a consensus among the prominent contenders in the last election that the time had come for the removal of the oil subsidy, especially when the government currently pays more than N7 trillion a year of borrowed money for the subsidy. Nigeria was going bankrupt while the oil industry was collapsing. It was no longer debatable that subsidy must go, the only debate was on how.
When the inauguration of the presidential candidate of APC, Bola Tinubu, was done on May 29, 2023, as the de facto President of Nigeria, based on the INEC’s version of their own election results, subject to the pronouncement of the case in Court, the idea of removing the oil subsidy was at the front burner. The previous regime had promulgated the Petroleum Industry Act (PIA) and made the removal of subsidy a legal requirement. It was stated therein that the subsidy shall end by the end of June and, consequently, commensurate money running into N3.36 trillion naira was appropriated for it for the six months. Unfortunately, standing on the inaugural ground at Eagle’s Square, the de facto President, Bola Tinubu released the bomb, “oil subsidy is gone”.
What is disturbing about this unilateral declaration by the President is that a look at the speech prepared for him didn’t contain that statement he unguardedly uttered. The exact wordings of the text of his speech on oil subsidy was, “We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favoured the rich more than the poor. Subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.” If he had stopped at this, the chaos experienced in the oil industry, resulting in long queues at filling stations, the unjustifiable instant skyrocketing of the price of pms to about three hundred percent of the original price, the man-hour lost by people who slept at the filling station would have been averted. There was a jocular satire put out there, after he made the statement, in apparent display of arrogance of power, that oil subsidy was gone, to the tune that “The presidential inauguration party is currently being held across all filling stations in the country. The turnout is very impressive and encouraging”. The Nigerian people were aghast that while Tinubu was dancing a cinderella presidential inaugural dance in Aso Rock with his wife, Oluremi Tinubu, celebrating in the midst of poverty, Nigerians were wallowing and sleeping in the filling stations, on empty stomach, looking to etch out any litre of fuel to drive their vehicles home. They were still on that line when the pump price changed from about N185.00 to about N537.00 per litre. Some of the transporters on line simply acquired enough fuel to drive them home to park their vehicles in their compounds for sale or retirement from the trade as continuing with the trade will certainly be unsustainable.
The response on the economy was swift and the restiveness imposed on the society was instant. The cost of everything was jerked up from the cost of bread. Transportation cost has jerked up and the salary of civil servants have become valueless. It is unconscionable that a President that had in his speech that “Our administration shall govern on your behalf but never rule over you. We shall consult and dialogue but never dictate. We shall reach out to all but never put down a single person for holding views contrary to our own. We are here to further mend and heal this nation, not tear and injure it.”, can on the same podium, speaking from different side of his mouth, without consultation with anyone or necessary institutions, and without due regard to the Appropriation Act, duely enacted by the National Assembly, which provided that subsidy can only end by the end of June, and with insensitivity to the negative ripple effect of the decision on the economy, declare that “oil subsidy is gone”. This shows that he was reading from a prepared speech which he didn’t believe in or didn’t understand its implication. The prepared speech was the poetic representation of a preferred future, his personal outburst was a true reflection of his person and mindset.Understandably, labour organisations of different persuasions kicked against this declaration without consultation and the combatants are strategising on the next line of action. Oil subsidy should be carefully removed when the country is saturated with the supply of pms and when the monopoly of NNPC is effectively removed from the oil industry. A little tarrying to welcome Dangote Refinery and licensing of other modular refineries would have done it. We must however note that for whatever it’s worth, this is an obvious false start. We are looking for leaders who will inspire us, not intimidate or manipulate us. The managers and handlers of the President should guard him closely to remain on his text message and stop his ad-libs that may certainly put this country at risk. The words of a President, whether oral or written, matter. Considering his state of health and mind, his handlers must find a way to ensure that these infirmities do not destroy our beautiful country pending the determination of the petition in court against his qualification to be President and the purported declaration and return of his candidacy by INEC as the winner of that presidential election.
