It must have been exasperating to watch officials of the Nigerian national Petroleum Corporation, NNPC, Department of Petroleum resources, DPR and the petroleum resources ministry all speak, as it were, in tongues in the wake of the embarrassing fuel shortage that gripped the nation few days to Christmas. Seems one moment when lies would trump truth-telling; obfuscation, clarity. After a month-long circus in which corporate dereliction accounts for no mean part, we are, as always, pretending to getting around to the bolts and nuts of the vexing issue even if, as in times past, the solutions proposed not only amounts to merely kicking the problem down the road but are merely attempts to recycle worn solutions as new.
And so we are back to the pre-May 2016. Back to the same wearisome arguments about the co-efficient of fuel-price determination; the import price parity and the troubling mathematics of fuel cost recovery; of subsidies and opportunity costs; of phantom and cooked up figures. And finally, to the ugly, though hard, truth about the economics of a product around which other elements in the polity spins.
Never mind the posturing by Maikanti Baru, Nigerians know who it was that finally won the day. Never mind the docking of the usual big boys of the fuel import trade – Depot and Petroleum Products Marketers Association (DAPMAN) and their perennial sparring partner, the Independent Petroleum Marketers Association of Nigeria (IPMAN), the latter of which complains to no end about getting fuel to dispense even when the hordes of shadowy players had enough to flood the streets with; in the end, the cold arithmetic of the business or what some choose to call the fundamentalism of the market seems to have finally prevailed. Something, it has finally dawned, must have to give about the current price of the ‘essenco’ called petrol. It is either a review of the current price of N145 per litre for petrol to something around the N180 per litre band, or a return to the full-blown Nigerian nightmare called subsidy!
Either way can only be bad, terrible news. Whereas a review of the current price would seem beyond contemplation at a time real incomes have witnessed an unprecedented decline under the Buhari administration, a return to the era of subsidy on fuel would be just as toxic for an economy said to be hungry for development funds. However, like every single public policy issue in this clime, it is not that the problems suddenly chanced upon us, or would require some complex algebraic formula to decipher; the problem stems from the game of denial by the NNPC and its principal the federal government. Rather than level with the citizens on the dilemma posed by the rising oil prices and unstable exchange rates considering not just our dependence on fuel imports but the fact that we have absolute no control over the global price of crude, they resort to drawing a veil of secrecy on what is ordinarily a straightforward economic issue.
The truth is that some newspapers had as far back as October 2017 more than speculated on the return of the subsidy regime. Vanguard actually reported a figure of N586 million daily as fuel subsidy following the rise in crude oil price from $49 to $58 per barrel then. Today, with oil prices closing menacingly on $70 a barrel mark, we should be looking at a much higher figure of the subsidy than the N586 million daily reported for October 2017. And so, the question naturally bears asking – what happens should oil price hit, say $100– a price not exactly inconceivable given the volatility in commodity prices?
Which is why Nigerians should take the theatrics by Maikanti Baru and company with a pinch of salt. Nor should anyone for that matter be deceived by the effort to conceal the corporate incompetence of the minders of the oil industry.
By the way, does it strike anyone that the Petroleum Products Pricing Regulatory Agency, PPPRA, the agency charged with the determination of the fuel-price template thinks it is better to play the ostrich – pull down the template element from their website as if by so doing, the price movements would be guaranteed frozen!
What to do? Get the figures out. As far as I can see, only the National Assembly stands in good stead to help lay all the cards on the table. Certainly not the subsidy-denying PPPRA. Much as we are a long way from the era of denying the arithmetic of the differential between the cost of import and price at the pump, the fact remains that the subsidy debate remains largely emotive. Yet, to the extent that there is no other name given under the heaven to describe the under-recovery of costs save subsidy, establishing the quantum of the differential will surely be a good step not just towards stripping the fuel trade of its needless mystique, but removing the veil behind which officials hide to prey on the system! Can anybody think of a better way to psychologically prepare the citizens for the imminent liberalisation say, when Dangote refinery and others, finally come on stream?
Change and its many semantics
“I have kept a close watch on the on-going debate about “Restructuring”. No human law or edifice is perfect. Whatever structure we develop must periodically be perfected according to changing circumstances and the country’s socio-economic developments. We Nigerians can be very impatient and want to improve our conditions faster than may be possible considering our resources and capabilities. When all the aggregates of nationwide opinions are considered, my firm view is that our problems are more to do with process than structure.
We tried the Parliamentary system: we jettisoned it. Now there are shrill cries for a return to the Parliamentary structure. In older democracies these systems took centuries to evolve so we cannot expect a copied system to fit neatly our purposes. We must give a long period of trial and improvement before the system we have adopted is anywhere near fit for purpose”.
That was President Buhari in his New Year broadcast. For those clamouring for ‘restructuring”, it must have been disappointing that the president thinks that the current structure can be salvaged by some process of re-engineering.
Rather than engage in the endless but increasingly unfruitful debate on the path that the Buhari administration would rather not tread, why don’t we, for a change, focus on interrogating the so-called re-engineering which the president seems enamoured?
It seems that only then can the citizens begin to meaningfully account for the administration’s scandalous squandering of a national goodwill!
I rise!
