By
Felix Oboagwina
Our “tear-rubber” President Bola Ahmed Tinubu flaunts a Curriculum Vitae saying he worked as an Accountant in Mobil. However, in his reckless Inauguration Day declaration that “fuel subsidy is gone,” Bola displayed a doubtful grasp of economics and mathematics. And I am hardly qualified to tutor the former Lagos Governor on arithmetic. Even if we acknowledge that the last regime railroaded Tinubu into the policy, to him alone belongs the blame for all the evils that have since trailed that shallow pronouncement. Or did he forget his Yoruba adage that, “Ti a ba ran ni n’ise eru, a fi t’omo je,” meaning, “Even if one is sent on an errand befitting of a slave, he should deliver it with the decorum that befits a freeborn?” Simply put, fools rush in where angels fear to tread.
Tinubu failed to look before leaping. Unlike him, observers looked and saw the red flags when Mele Kyari, the CEO of the Nigerian National Petroleum Corporation (NNPC) Limited, opened his mouth very recently and said there still would be no reduction in the current price of fuel (then officially N488) even if the Dangote Refinery and the country’s four refineries worked at full capacity. Such strange words came from the man seated atop the country’s oil structure. To the discerning, that was a red flag.
The impression created all along was that the post-subsidy price of the product remained high because Nigeria depended solely on imported refined fuel for domestic use –an inexplicable aberration for a country owning four refineries, all comatose. How is the price of imported petrol calculated in Nigeria? The template of the Petroleum Pricing Regulation Agency (PPPRA) gives some indication. When imported, petrol comes with a landing cost, composed of:
- Product cost
- Traders and insurance margin
- Shipping
- Charges by government agencies
- Financing and banking charges and
- Overseas insurance
- Storage charges.
A couple of years back, all these brought the cost to about N358.24 per litre. To sell this imported product at N185 per litre pump price, government paid a subsidy. With local refining, all the extra costs should disappear. What you then pay on the fuel should be the cost of crude and the cost of refining, local over-heads, transportation and marketer’s profit mark-up. All these are local contents. Yet here was Kyari, GMD of the country’s oil import monopoly telling the world that local refining would not result in any price differential!
How? Mele’s price for locally refined fuel just doesn’t add up! On Tuesday, the man upped the ante and announced a new price of N620!
All this doesn’t add up too for many people who have submitted that the price of locally refined petrol should not be more than N50 per litre. For that matter too, the prices of locally refined diesel (AGO) and kerosene (PKO) should, also, swing in that price range. But why are we now paying so much for petrol?
Bauchi ex-Governor Bala Mohammed offered some insight when he revealed recently that one of the fuel subsidy beneficiaries, an oil magnate, perhaps gripped by a pang of conscience, begged him to tell President Muhammadu Buhari to stop subsidy payments because “they were tired of making money from subsidy payments.” It means that the country has been paying “mumu” money through over-invoicing between NNPCL and marketers. Nigeria’s 200 million people have been taken for a ride. Oil firms have been reaping where they did not sow –harvesting seeds they never planted, since 2016 when NNPC became the sole importer of fuel products into the country. So who has been paying this money? Who has been collecting? They know. Everybody who should know knows. But who will muster the political will to bell the fat cats?
With that summary announcement stopping subsidy payments, does Tinubu know what he has done? No, BAT doesn’t. Let us attempt an illustration.
Agbero touts are familiar figures in Nigeria’s transport sector. These touts, for doing nothing and without adding value to the sector, stay on the roads and bus-stops and force money from drivers and conductors. These touts are louts. Their takings are unjustified and indefensible. However, just imagine that due to the outcry of the drivers and conductors, authorities now decide that instead of the Agberos collecting daily takings from drivers and conductors, the touts should now collect from passengers directly. In such a scenario, head or tail, the Agbero wins. He still takes home his full “TITLE” at the end of the day. In fact, this new system put in place by the Agbero apologists yields more profit because he collects more money from more people. This system throws the people under the bus.
Prior to May 29, Nigeria’s pump price stood at N185. The removal of subsidy propelled it to N500, then N620 and more. The result? A plague of inflation has infected everything –transportation, pure water and food, not the least. Fuel prices went up, standard of living came crashing. People have retired their cars, some are selling them off.
Irony of ironies, although fuel stations today sell products at a higher price, fewer vehicles come in to fill up. Sales have gone slower and lower. All the signs are there –fuel is overpriced. Petrol has been priced out of the reach of Nigerians. This explains the consumer resistance.
Among the several insane arguments officially being bandied to justify the need for higher fuel pricing is that smugglers take subsidised Nigerian petrol across the border to neighbouring countries. Why should Nigerians suffer for the security lapses? Agencies appointed to man the borders and prevent such activities should do their job or lose it, shape up or ship out. These include the Police, Army, Customs, Immigration, DSS and DMI. We cannot be paying their salaries to prevent such a loophole and still suffer the consequences of their dereliction. Even then, the excuse sounds lame. Why? The quantity of fuel smuggled out is infinitesimal.
The real criminals are the cabal and parasites that Buhari as President and Petroleum Minister allowed to grow fat on the blood of Nigerians via a corruption-ridden system. It is ironical that this perfidy happened under APC, Tinubu and Buhari, who, while in opposition, led and sponsored mass protests against the removal of fuel subsidy by Goodluck Jonathan on New Year Day 2012. Imagine the contradiction. This was Buhari whose campaign in 2015 revolved on petroleum subsidy being a scam that must end. Not only did Buhari fail to stop the scam, it ballooned under his watch. While the PDP regimes of Olusegun Obasanjo, Umar Yar’Adua and Goodluck Jonathan joint spent N8.94 trillion ($23 billion) as petrol subsidy in 16 years, Buhari alone paid N93 trillion subsidy in eight years. Na wa o!
-Nigerians deserve (yes, DESERVE) cheaper kerosine, diesel and petrol. As the Arabs and Libyans do their own, Nigerians own the Black Gold of petroleum natural resources as a God-given commonwealth and birthright. Let no one tell us anything different.
What Tinubu must not do is pass fuel subsidy from the government to the people like an “Agbero” apologist, while the cabal and the cartel continue smiling to the bank with business going on as usual. And getting the pricing mathematics correct will begin with Tinubu ridding NNPCL of Mele Kyari and his ilk.
What are the realistic prices for kerosine, diesel and petrol, with crude oil sourced locally and production done locally by Dangote’s and the nation’s four refineries jointly churning products out at full capacity? Some say N100, plus or minus some few naira. Yes, and why not?