Opinion
The Many Faults Of Deregulation
The timing of the recent removal or call it partial
removal of subsidy on fuel by the Federal Government last Wednesday is not my major concern. Worrisome, however, is the process. Why and how did we get to where we are?
Subsidy to a lay man is that amount which the government pays or takes care of in order to bring down the cost price of an essential commodity or service aimed at giving the citizenry a leverage.
Subsidy is a global practice, an economic theory designed to stimulate economic development. Therefore, subsidy cannot and should not be regarded as welfarism for any reason.
The recent increase in the price of premium motor spirits (PMS) from N80.50 to N145.00 comes as a bitter pill as well as a punitive measure to Nigerian masses who always fall victim of every government ‘s policy.
When you say or do the right thing the wrong way, it amounts to insult, insincerity, and insensitivity. It smacks of deception and lacks cohesion in terms of motive.
To the man on the street, the low income earner and the man whose salary has remained stagnant in the face of all these price increases, the new fuel price regime is insensitive.
Barely one year ago, President Muhammadu Buhari told Nigerians that he knew nothing about the existing subsidy on fuel. He further said, if at all such exists, it would be foolhardy to think of removing it, noting that any hike in price of fuel would virtually affect prices of every other commodity and service.
To buttress this point, a leading member of his campaign team and current Governor of Kaduna State, Nasir el Rufai, was quoted as having said that Buhari would only “clean up the subsidy system, catch all the subsidy thieves and send them to jail”.
As it has come to be, President Buhari has admitted that there’s actually subsidy on fuel, but has not only failed to catch the subsidy thieves but has gone ahead to renege on his promise of not removing fuel subsidy. Doing so without any consultation is even the highest level of impunity.
Even if we agree that deregulation of the downstream sector has its own benefits, did the Federal Government think of the negative effects the deregulation policy will have on ordinary Nigerians?
On assumption of office, the Minister of State for Petroleum, Dr Ibe Kachikwu, told Nigerians that he was earlier informed that Nigerians consumes between 50-55 million litres of premium motor spirit. But a thorough check confirmed to him that Nigerians only consumed about 45 million litres per day. This shows that about 10 million litres were being diverted daily. Quite a huge amount being stolen!
But then what has the Presidency and the Petroleum Ministry done to bring the oil thieves to book? Must the government always shift its policies to suit those in power not considering the plight of the ordinary Nigerians? Must the government take only the blood of the ordinary Nigerians and the tears of the low income group to fix our dwindling economy?
Till date, the United Arab Emirate still spends about $250 million annually on fuel subsidy. If Abuja can rise to 50% development level of Dubai, we’ll be close to heaven. So, I don’t think it is the subsidy that is crippling our development but corruption
The NNPC that sources its forex at CBN sells at N145 and tells independent marketers to sell between N135 and N145. How feasible is that? How can a businessman source forex from secondary sources and come back to sell at government price?
Some argue that as time goes on, market forces would crash the price of fuel. May be. But we should remember that it took some years before the prices of the telecommunication (GSM) came down. Besides, telecommunication is not as essential as the entire economy.
It is on the same premise that I faulted former President Goodluck Jonathan’s 2012 move in that direction. Even then, Jonathan put some cushioning measures in place before he made the move.
Sure-P projects, though was marred by corruption, was one of the few palliative measures put in place by the Jonathan government. Why can’t the present administration do same?
Nneka Amaechi-Nnadi
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