Fuel Subsidy: Need For Caution

Since the Federal Government of Nigeria re-visited the need to remove subsidy from petrol, the organised labour and sections of the civil society have not stopped reacting. Incidentally, there does not seem to be enough caution in responding to this matter that enjoys superlative national interest.

While the Nigeria Labour Congress (NLC) threatens to organise protests and even strike, a particular trade union only a couple of days ago threatened to shut down Nigeria. The effect hostile words like these can have on the nation can be regrettable.

Suggestions for the removal of subsidy from fuel, is not new to the discourse on the Nigerian Project. Even more surprising is the fear that Nigeria which survived the removal of subsidy on the other petroleum products, may not do the same with the removal of subsidy on fuel alone.

Even so,  we cannot mis-understand the position of both the organized labour and the civil society. Already, the Nigerian worker faces about the worst conditions of service in the civilized world. Even when the government finds it profitable to implement the law on the new national minimum wage, the remuneration regime  remain pitiable.

For the masses, there would be no need to enumerate what a higher pump price of petrol would do to them. Clearly, there would be widespread suffering as cost of everything would rise in response to higher cost on transportation. Indeed, some people would say subsidy should remain because cheaper fuel is about the only thing they enjoy in Nigeria.

On the other hand, government believes that the removal of subsidy on petrol would be in the best interest of every Nigerian in the long run. The government says the N760bn it subsidises petrol with every year could revolutionise agriculture, power and the employment situation in the country.

From our stand point, we see the legitimacy of both positions. What is at play is the conflict between short run and long run effect of the issue. These are what the various stakeholders should be able to sit down and discuss responsibly instead of throwing brick bats and raising the blood pressure of innocent citizens.

We cannot believe that government would bring up the issue of subsidy because it wants to see the generality of Nigerians suffer. What would be their gain? In fact, if they were selfish, they could leave the matter alone and safeguard their political positions like other governments before them. But Nigeria cannot continue to do things the same way and expect better results.

The subject of fuel subsidy is well understood. The issue is that many Nigerians want the country to make omelette without breaking eggs. Those who also canvass the idea that every nation in the world subsidises aspects of their economy also fail to mention that it is agriculture and health care that take the lead, not fuel.

Besides, the subsidy had been made meaningless by a few Nigerians who keep the product from the rest of the country. It is common knowledge that until the emergence of the present government, fuel was scarce across the country. Apart from the difficulty of getting some to buy, amidst fears of adulteration, many bought at un-imaginable prices.

This is because, a few Nigerians divert the subsidised fuel to neighbouring countries, where they sell at higher prices. Therefore, while these people make money Nigeria and its citizens bear the brunt. Yet, these are the people who would incite other Nigerians to kick against the removal of subsidy, even shut down the country because of their petty interest.

Perhaps of more concern is the understanding that investors who have received licence to build refineries in the country could not do so because of the subsidy. Of course, they cannot make profit or even get to the market if the Federal Government continues to pump cheaper fuel into the market. This, perhaps also justifies the construction of refineries by Nigerians outside the country, even in neighbouring countries.

From the foregoing, the question every Nigerian ought to ask is, “for how long should Nigeria continue to import fuel? Or for how long should the Federal Government subsidise fuel and compromise the health of the economy?  The answer is obvious, and Nigerians must take courage and bite the bullet because the pain would be but for a short time.

We can only insist that the Federal Government makes the sacrifice worthwhile. Nigerians will need to see the greater benefit the N760bn would deployed to. Nigerians would want to see the development of agriculture and other sources of income for the country. They would want to see electricity, roads and security.

Interestingly, some labour groups have also accepted the need for the removal of fuel subsidy. They say they are not 100% against deregulation, but it should not be import  driven. They want to see specifics on how government hopes to increase local capacity for refining petrol and achieving 100% supply from local refineries in five years.

They also fear that government could remove subsidy only to share the proceeds to the three tiers of government. But that they need to see how the decision would reduce poverty, un-employment and suffering of the masses because the Nigerian state appears to be short on implementing reforms and policies that would benefit the masses.

Therefore, the platform should be provided for meaningful inter-face of the stakeholding groups to enrich the quality of governance in the country, rather than the un-guarded threats that always pitch the government against some interest groups.