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Return of fuel subsidy -Vanguard Editorial

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Apparently, the more things change the more they remain the same in Nigeria.  After months of denying what most economists and financial experts had already known the Federal Government has finally admitted that N774 million per day or N24bn per month is now being spent to subsidise the importation of petroleum products.

The Nigerian National Petroleum Corporation, NNPC, while lifting the veil over the badly kept secret by the Buhari administration also placed most of the blame on smuggling along Nigeria’s borders with neighbouring states. According to the narrative, which rings like a familiar tune from the much-discredited past administrations, the consumption of fuel had gone up from 35 million litres to 50 million litres in recent months.

That 42 per cent jump which should have resulted in massive security interventions and the arrest of some culprits has merely led to the wringing of hands by Nigeria’s security agencies – Directorate of State Services (DSS), the Nigerian Customs Service (NCS) and the National Intelligence (NIA). Instead of these bodies charged with security the vital economic interests of the nation swinging into action to deal with those diverting our imported petroleum products to foreign countries and causing hardship for Nigerians, the impression Nigerians get is one of a government totally helpless to halt this increasingly crippling economic sabotage.

One of the reasons that President Muhammadu Buhari gave for making himself the Minister of Petroleum Resources was that he wanted to sanitise the oil industry, especially the NNPC. Obviously, little has been achieved in that direction in view of the assertion by the President of the Senate, Dr. Bukola Saraki, that: “the NNPC stinks”, at a recent public hearing of the Senate Committee on Petroleum Resources (Downstream) attended by the NNPC GMD, Dr. Maikanti Baru and the Corporation’s top brass.

We had expected, as part of the “change” that the APC had promised Nigerians during the 2015 campaigns that by now the NNPC’s affairs, which have traditionally been shrouded in secrecy, would have been made more transparent. We had thought the Corporation would have been unbundled, privatised or made a more efficient state-run business like Malaysia’s PETRONAS and Brazil’s PETROBRAS. What we see, instead, is the retention of the discredited, corruption-prone model which the PricewaterhouseCoopers (PwC) audit of the Corporation’s accounts in 2014/2015 had declared outmoded.

Unless we reform the NNPC, deregulate the downstream sector of the oil industry and encourage the profusion of refineries in Nigeria, nothing will change. The Corporation will remain the cesspool of corruption. Fuel subsidy payments (whether real or imagined) will continue. Importation of petroleum products, fuel scarcity and the diversion of petroleum products to neighbouring countries will never stop.

We are still waiting for the “change” in the oil sector.

Vanguard

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