Fuel scarcity and the follies in Saraki option

Senator Saraki

Bukola Saraki

By Bomi Samuel

His first salvo came when the Senate received his motion that according to expectations would have received applause for targeting at probity and anti-corruption, which the government, the National Assembly inclusive, champions as major slogan. Former governor of Kwara State, Senator Bukola Saraki, initiated a motion in the Senate for the investigation of the N240b budgeted in the 2011 Appropriate Act.

The silence that followed the motion was loud enough to make watchers fear that some powerful interests benefiting from the manner fuel subsidy is managed might have found their ways into the National Assembly to ensure that the motion does not come up to anything. To some, Saraki seems to have stepped into the terrain of cabal men who never want any interference with their method of management of public resources, especially the 2011 budget.

People keeping track of the motion say that since it was presented before the Senate, it has been listed for consideration severally but unfortunately, each time it was carefully dropped or avoided for one excuse or another.

Saraki represents the Kwara Central Senatorial District and justified his action on the provisions of Sections 88 and 89 of the 1999 Constitution, which empower any chamber of the National Assembly to probe any sector of the nation’s economy especially as a means of curbing corruption or saving the nation unnecessary waste in public spending.

What really worries me is if Saraki needs someone to remind him that in Nigeria nothing puts the rulers and the ruled on warpath than the issue of fuel subsidy removal and the resultant increase in fuel price and nothing also reveals more policy contradictions and double-speak than this time-worn subject. Nigerians are always of the opinion that any removal of subsidy only feeds ‘fat cats’ at the expense of the poor and pays for gross inefficiencies down the fuel import value-chain.

Now the battle line is drawn all over again. On the one side are the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) representing Nigerian workers; and on the other side the government – they are all putting on gloves to do battle on the issue of fuel subsidy–the bogey to which the suffering masses of Nigerians have been subjected by every successive government that has run out of money to, as they claim, undertake new development projects as well as maintain existing ones. Two weeks ago hundreds of workers marched on the national assembly to demonstrate their opposition to plans to remove subsidies on petroleum products. According to experts, if government has its way and the subsidies are removed, a litre of petrol would cost N150.

Our recent economic history is replete with several instances of subsidy-removal. From all indications, Jonathan’s government is seeking to remove fuel subsidies so that it can use the proceeds to repair and revitalise existing refineries. This is definitely not a departure from recurring argument successive governments have given for removal of fuel subsidies in the past, which has always been that they need funds to implement both capital and recurrent projects.


Even at a point in time, we have listened to some ridiculous reasons why fuel subsidy must go, including the fact Nigerians were buying a litre of petrol too cheaply because it was less than the price of a bottle of coke. One doesn’t have to be an economist to rationalise and know that buying of a bottle of Coke is a matter of choice while the price of petrol affects every Nigerian and that as soon as the issue of subsidy is raised, anytime in our history, it also raised an automatic inflationary effect on every area of our daily living, raising astronomically the cost of transportation, consumer goods, health bills and even school fees. I know most Nigerians can do without a bottle of coke for six months. The effect of fuel price hike is always unbearable even for the well to dos, as the common man is further put under unbearable economic pressures, driving many into desperation.

The plank of Saraki’s motion is transparency and accountability in the management of petroleum subsidy and why it is important to investigate it. A peep into the motion also revealed that the Federal Government operates a fuel subsidy scheme with the policy purpose of making petroleum products available and protecting the people from the economic shocks that paying the true value of the prices of the petroleum products may cause. He, however, insisted that in sponsoring the motion, he is propelled by the need to make the scheme more transparent, corruption-free and competitive within an appropriate legislative frame work and in compliance with the Appropriation Act.

Nigerians who have been following the debate on fuel subsidy removal know that the federal government has been inundated with calls to institute a probe into the activities and operations of the Nigerian National Petroleum Corporation (NNPC) in the past. The calls are predicated on the fact that nobody knows the exact amount the country earns from the sale of crude oil. Every attempt to know this has often been frustrated through manipulation. In addition, the country’s refineries have not worked in the last 10 years because some powerful forces do not want that. Knowing the consequences of conducting a probe, each time the calls are made, those who think that such action is targeted at them do everything to frustrate it.

But Alas! The same Saraki who exposed the ills and armed with the knowledge that a strong cartel is holding the nation to ransom turned around to canvass for removal of fuel scarcity. Saraki, who is the Chairman of the Senate Committee on Environment and Ecology, observed that although N20 billion was set aside for subsidy on a monthly basis in the 2011 Appropriation Act, a total sum of N165 billion was expended in August, 2011 out of which NNPC got N88 billion and independent marketers N77.7 billion. He observed that although N240 billion was budgeted for the entire year, a total sum of N931 billion has been spent as at August ending, translating to a variance of N771 billion or 700 percent above the budget. Then why his capitulation to making the masses suffer the crime they did not commit? This Saraki’s option of increasing pump price is thus riddled with follies that need attention.

The Central Bank Governor Sanusi Lamido Sanusi was also recently quoted by the Daily Trust as insisting on the deregulation of fuel prices, arguing that the country “was feeding refineries abroad to the detriment of the ones at home by paying subsidies on imported refined petroleum products”, while noting that we are keeping refineries abroad open and shutting our own adding that the ministry of finance has supported deregulation but there would be a safety net. What is or are the safety nets in specifics?

What Saraki and his co-advocates of deregulation may have missed is that the general populace is disenchanted with most of government programmes premised on the fact that government actions and measures to reduce poverty never goes beyond the official launch of the policy document. This is a fact that can be easily verified. Again, financial technocrats in Brussels and Washington are more obsessed with the pace of privatisation than the transparency of its process. It may be noteworthy to state that in much of Africa, there is no clear boundary between the private and public sector, the former is frequently an extension of the later and quite often than not, it is government officials and their associates that end up buying these public holdings.

Towards the expiration of Olusegun Obasanjo’s tenure and even of recent, huge sums of money were earmarked for the resuscitation of the refineries, all in an attempt to put a stop to petroleum importation. At a point, we were inundated as a nation with the talks of downstream and upstream sector deregulations, yet nothing has put the check incessant price hike or rejuvenation of our refineries. If as we are now been told, after so much has been spent both in repairing of the refineries – which are still not working – and signing of papers for the construction of new ones – which information has it that none of the companies that got the contract had made move to commence Environmental Impact Assessment not to talk of starting job, shouldn’t those charged with the assignment be made to account for the continuing disrepair of the refineries? And why on earth should the man on the street be made to provide another fund, when earlier ones provided through public funds has been squandered by those put in charge?

It should not be business as usual and for once we Nigerians should be relieved of the burden of increase in petroleum prices by the fact that there exists an agency of the government saddled with the responsibility of fighting corruption and if the the only reason we as a people should suffer is because some few people are holding the country in the jugular through corrupt practices then EFCC should put all its iron in the fire to fish them out and hound them into jail. This in my opinion is the way forward for Nigeria as all Nigerians including leadership of all the civil unions march in the right direction by calling for the prosecution of everyone linked and involved in the fraud surrounding fuel subsidy.

Some of the questions Bukola Saraki and his compatriots need to answer go thus; How has similar schemes and projects fared in the past and how well re-organised is the government agencies and mechanism to cope in the face of corruption that has become a second nature? What has been the effect and impacts of past efforts and programmes as related to palliative measures following past increase in fuel price? How possible is it to identify projects, measure and evaluate individuals businesses that are the product of such interventions? And if answers to these questions remain a puzzle, would it not be sensible then to delay the removal of subsidy until the government delivers on the electricity supply required to service industries, before the removal of fuel subsidy sets Nigeria on fire again?

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