The proposed N340 per litre pump price for PMS (1)

BY SUNNY CHUBA NWACHUKWU

Sunny Nwachukwu (Loyal Sigmite), 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

Civil society, comprising all organs other than the government, is vehemently opposed to the proposed plan to increase the pump price of PMS from N165/litre to a record high of N340/litre in the country. The proposal, which is in the front burner of national discourse, has already been adjudged, most unfortunate; even with the admission that there’s an urgent need for the government to generate funds at this point in time. The decision to implement it under the impression of full removal of petroleum subsidy (on PMS), openly portrays the government in a bad light because, the implication of the consequential impact on the general public, (as being speculated, rightly or wrongly), seems unimaginably frightening because, the poor masses impacted by the usage of PMS are in the majority.
The government is, admittedly, under serious financial stress, especially with a rising population in an overstretched economy. But, based on the right principle for adequate wealth distribution in Nigeria, PMS might not be the right substrate for generating such funds by the government. The focus should rather be on luxury goods, facilities and utilities where the very rich ought to be targeted. A good example could be an increase on aviation fuel for private jets used by the very rich. Another item that could be used by the government to soak funds from within could be aimed at stupendously wealthy Nigerians consuming diesel for powering their expensive mansions.
The cost of living also needs to be considered here for the purpose of adequate wealth distribution as this affects standard of living. Such a drive for funds by the government ought to also come with packages, fiscal policy on taxing luxury items, making it possible for Nigerians to live on bank loans (for some essential purchases and investment, including housing, cars, phones) like you have in some developed countries. This on its own will contribute to the nation’s economic recovery and development.
All the known trade union organisations in the country are not left out in this looming agitation against the increase, if the government dares to implement this very unpopular proposed plan. It is against this background that some suggestions might be useful for the government to consider. The confusion around the issue is so vast that the general public appears to be mixing up issues, largely out of ignorance, and based on the exigencies of the biting economic hardship among the highly populated poor in the economy.
The idea to totally stamp out this long overdue, ill-fated, economic-rogue policy, that has always been badly applied, and which has sucked the national treasury dry, notoriously called the ‘Petroleum Subsidy’, is a welcomed development, must be executed with despatch, if truly our economic drivers in the oil sector now have a repentant and sincere heart to save and deliver this ailing economy. This point is what the general public appears not to understand well, or realise, that the “whiles of the devil” (now seen as pump price increase) is completely a mixed up issue, and should be treated on its specific merits (i.e. subsidy removal and pump pricing).
The purported market forces, which come into play in competitive pricing in an open market economy, is in this scenario totally distorted and in disarray from its original and natural mechanism. In this particular scenario, the past callous activities and actions practiced over so many decades by some elements amongst the nation’s economic drivers in the oil industry (known in simple parlance as corruption), are the root of the confusion being faced by the general public, as well as the government, in interpreting the workings of subsidy removal versus the proposed pump pricing. This is because they ignorantly didn’t understand that the plague ( which is worse than the COVID-19 pandemic), called the Petroleum Subsidy regime, ought to have been done away with for a long time, as a matter of urgent emergency!

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