By Peter Ovie Akus
SIR: Last week, Nigeria made history when the departing President Muhammadu Buhari commissioned the multi-billion dollar Dangote Refinery and Petrochemical Company in Lagos. It is the largest single-refinery train in the world with the capability of meeting 100 percent of the nation’s domestic demand for fuel. Also, it is designed to process both the Nigerian and other types of crude oil. With the commissioning, Nigeria has taken a massive leap in the direction of ending the perennial nightmare at fuel stations with its associated disruptions.
The cost of fuel imports to the nation’s treasury has become injurious and can no longer be sustained. In 2015, we spent N351 billion on subsidy payments. By the end of 2022, it had increased to N4.39 trillion. The current fuel subsidy regime has become a cash cow which has produced a few billionaires at the expense of the suffering masses whom the subsidy is originally intended for. Simply put, we are subsidising the rich at the expense of the poor.
Fuel price determination is an issue which needs to be addressed. In the past, organised labour has insisted that support for subsidy removal would be predicated upon local refining of petroleum products. With the Dangote Refinery becoming operational in about two months, will organised labour abide by its words? Or would they continue with their obsession with price regulation?
Here is a caveat. Local refining of petroleum products would not automatically translate into lower pump prices. What it will lead to is a steady and uninterrupted supply of refined petroleum products to marketers. The invisible hand of capitalism would determine the pump price of fuel at a rate that is beneficial to both the seller and the buyer.
The Bola Tinubu administration should consider putting in place antitrust legislation as a proactive measure to prevent the establishment of a monopoly in the refining of petroleum products. Having multiple players in the industry would be of immense benefits to our economy. It would create lots of direct and indirect jobs, and earn much needed foreign exchange for the country.
Government should also consider building pipelines for easy transportation of crude oil and refined petroleum. And rail lines to link the refinery with the national rail network. This would reduce the pressure on roads which often leads to wear and tear, causing avoidable loss of lives through accidents. The coming on board of the Dangote Refinery is a win-win situation for the government and the citizenry. Importation of fuel will soon be history.