What Fuel Subsidy Removal Really Means

A few years ago Nigeria was listed in some quarters as a most flamboyant and profligate country. That was a time when Chief Olusegun Obasanjo said that “We are spending money like a drunken sailor …”
Before his death, late Chief Obafemi Awolowo had warned that the Nigerian currency was sliding into the status of tissue paper. An economic expert listed profligate spending habits as including huge hotel bills and foreign travels by government officials, purchase of exotic cars, state sponsorship of pilgrimages, lavish spending on funs, funerals, parties, entertainments, etc; frauds in high quarters, abuses in the management of foreign loans and living on credit facilities.
Despite the introduction of “austerity and belt-tightening” measures as state policies to curb profligate spending, there were no changes in habits or conditions. Today, even with the biting effects of past flamboyance and profligacies, there is no indication that we have learned anything from the past or turned a new leaf. Usually, hike in the prices of petroleum products is a ready means of raising money when the economy begins to bite hard. Nigerians were told that since we spent more money to consume a bottle of “Coke” soft drink, it was sound economics to divert such money for same content of petrol. Choose between Coke and petrol!
It is an irony of the nation’s sense of humour that the apostle and advocate of the “Coke and Petrol” equalization policy, became indicted for being responsible for the nation’s economic adversity, by drinking a cup of tea and accepting a gold wrist watch as gift from foreigners. Today, rumours about possible increase in the price of petroleum products are associated with taming the economy by the removal of fuel subsidy. Subsidy is our problem!
The logic about Coke and petrol price equalization was also applicable in subsidizing the cost of transportation of petroleum products across the country, to ensure that the price remains same every where. A driver operating in Eleme must buy fuel at the same price as the driver operating in Damaturu. Call it price quotarisation and equalization policy, whereby the cost of delivery of fuel is passed on as a collective tax. The logic of fuel subsidy expresses the endemic corrupt practices in the country. A clevery system of corruption and parasitism!
The most glaring and annoying aspect of the fuel subsidy issue is not in the production cost but in the consumption pattern. If we consider the fact that there are innumerable government officials using or controlling between three to ten vehicles each, all fueled at tax payers’ expense, then we can see a different meaning in the issue of fuel subsidy. Subsidy is defined as “money that is paid by a government or organization to make prices lower, reduce the cost of production of goods,” etc. In our case, subsidy translates into indirect increased taxation, to maintain a parasitic political economy, where the docile masses bear the brunt.
We have not faced the issues of corruption, mendacity and deceit as instruments of governance, with seriousness and honesty, as the issues deserve to be faced. Part of the demand by the International Monetary Fund (IMF) on Nigeria to remove fuel subsidy completely, is a part of the call for transparency in governance. The issue of transparency in governance is most glaring in the oil and gas sector of which the subsidy sing-song is the stump.
Needless to revisit the issue that there are ruthless predators and parasites, within and outside Nigeria, who have held this country hostage since 1970, with regards to the oil and gas sector of the economy. Unfortunately, the intellectual and political class of Nigerians is so docile or complicit that they can be easily out-witted or bought over by the faceless cabals that claim to own Nigeria and its resources. Are we not held hostage?
The strategy of control has been to use the forum of the nation’s lawmakers as a safety valve, to ensure a stability of the polity, through scandalous remunerations and patronage. When each Nigerian senator gets emoluments estimated to be four times the salary of the President of America , then we must ask who they are being asked to protect. Removal of fuel subsidy means removal of the hidden costs of maintaining an oligarchy under the guise of a democracy. Who is paying to support who?
Dr. Amirize is a retired lecturer at the Rivers State University, PH.

Bright Amirize