Fuel subsidy, deregulation and N5000 ‘salaka’ official deception

Sunny Nwachukwu, PhD, a pure and applied chemist with an MBA in management, is an Onitsha based industrialist, a fellow of ICCON, and vice president, finance, Onitsha Chamber of Commerce. He can be reached on  +234 803 318 2105 (text only) or schubltd@yahoo.com

Nigeria has for decades maintained its position as the largest oil producer in Africa among member countries of the Organisation of Petroleum Exporting Countries (OPEC). But the country has really not done well in terms of economic prosperity because it has roundly performed below expectations, in the midst of the bountiful opportunities for economic growth and development. Its hydrocarbon business has experienced very poor advancement in terms of making steady progress in establishing and investing in downstream operations, due to an uncountable series of corrupt practices within the system. This ought to have positioned the economy as a formidable, multiple value chain oil and gas industrial hub within the continent, if not for various reasons that point to unpatriotic activities of those managing the affairs of the industry who have over the decades taken selfish decisions that are unfavourable to the well-being of the state.

As a stakeholder and a bona fide citizen, I make bold to openly express that one is bitterly annoyed, totally disappointed, and has uncontrollable dissatisfaction with some managers of this economy over the past decades. These are managers who ought to have taken us to the ‘promised land’ through proper utilisation of the abundant naturally endowed oil and gas resources for economic prosperity. But they chose the path of self aggrandisement, wickedness, greed and inordinate ambitions.

The leadership of this country has failed the peoples and citizens of Nigeria. It is now an open show of shame, that the nation will be grappling with aimless policies, fraudulent programmes, and fruitless actions and visionless economic activities, falsely presented for recovery, but it’s all deceit!

We do not even appear to be out of this rouge bondage of senseless corrupt practices that viciously keep dragging us back from growing economically! We keep committing ‘economic suicides’ every now and then, through highly wired official financial misconducts and misappropriation of funds! Are these not crazy people in this country? Do they, at all, reason like normal beings, by their actions against the state?

In April this year, the federal government embarked on the rehabilitation of Port Harcourt refineries at a total cost of $1.5 billion. Just this past August also, the Federal Executive Council concluded on plans to fix both Kaduna and Warri Petrochemicals Refining plants at a total cost of $1.48 billion. Simple arithmetic gives a sum of $2.98 billion for these two projects, the ‘tangible assets’ that will ultimately rub off positively on all concerned in the economy. Assuming our current exchange rate is at an all high figure of N600/$; conversion from dollar to the Naira will turn $2.98 billion to N1.788 trillion. This will finally bring to an end the importations of refined petroleum products, as well as the prodigal wastage of our hard earned petrodollars, earned from the proceeds of upstream extractive operations; that can then be conserved in the nation’s foreign reserves.

How dare we ever, on this planet earth, think of a ‘N5,000 transport palliative for 40 million’, claimed to be the very poor Nigerians every month, totaling a whopping sum of N2.4 trillion in one year? Just because (at the instance of the world Bank’s conditions/demands; asking the Federal Government to kill fuel subsidy, come 2022), we have now woken up from our miserable, deep slumber on the subsidy regime (which I personally declared a ‘thorn in the flesh’ of the nation’s economy back in September 2008); and now want to remove it for a second time in less than two years, and implement a total deregulation on PMS?

Now, join me and compare these two figures. N1.788 trillion for rehabilitation of 445,000 barrels capacity of the government owned crude oil refining facilities; and N2.4 trillion ‘salaka’ to those, ONLY GOD knows who the so-called poor Nigerians are, and how they will be receiving the money? What a country? ‘Nigeria we hail thee!’ This is a senseless, corrupt-laden plan that will endlessly pin the economy further down, without making a headway out of the vicious cyclical economic doldrum! Clearly, government’s officials’ brains do not process properly anymore. And that is just because of the inordinate ambitions of the politically exposed persons managing the economy. How then can the economy recover or survive, if the leadership is blindfolded this much, by their own selfish desires against the state?

The inflationary costs of living, not even considering how to end it. The dismal local currency exchange rate is not considered either; on how to rejig its value. Most importantly, the means to knock down the pump price of PMS, now projected to jump to a high of N340/litre from the present N165/liter, is never thought about by these managers of our economy? It’s such a wicked world with a group that seems to only think of a dream of procurement of private jets at the expense of the lives of vulnerable Nigerians. And the so-called N5,000 palliative is just another window to continue this attack on the state’s treasury!

The advantages of the government expenditures in fixing the refineries (445,000 bpd capacity) for national income/economic efficiency are more reasonable than this ‘salaka’ that will never be accounted for. Nor would we know how it was spent or who the beneficiaries would be, given our abysmal failings in keeping proper records and a national database of Nigerians for such a social security net. You can already smell hopelessness and complete a hoax in the making!

Ettu Mohammed, in a recent paper on NNPC’s subsidy figures, posited that, “NNPC figures are fictitious and it cannot stand any scrutiny” restating that, “Nigeria is a crime scene” because, in February 2020 the Department of Petroleum Resources (DPR) told Nigerians that our PMS daily consumption was 38.2 million litres (being the known established national consumption pattern). The NNPC in June 2021 announced that it has risen to 103 million litres (170% increase, which was blamed on smuggling of the products to neighbouring countries); this makes the figures for subsidy payment shrouded in secrecy. All these outrageous figures around the subsidy regime do not add up to the landing cost of petroleum products. This, following the statement in June 2021 by the GMD, that the pump price at filling stations should be N256 per litre. We all quickly reacted and spoke up against such development.

The former CBN governor, HRM Sanusi Lamido Sanusi, has for umpteenth times spoken against the petroleum subsidy regime, in diverse shades. The earlier we realise our fault, the better for this economy. Deregulation has its merits because it fosters healthy competition amongst contemporaries, which will force down product prices in line with the prevailing market forces. It doesn’t in any way mean price increase (as the so-called planned N340/litre depicts). It’s only that the refined products are still imported, and are sourced at our hopeless and miserable local currency exchange rate of nearly N600/$.