The fuel subsidy administration has always been opaque. Its opacity has progressively deepened under the Buhari administration, causing more confusion and despair in the land. Shortly after he assumed office in May 2015, Buhari, riding on the wave of public adulation as the man who was believed to have the courage and the capacity to fix what was broken and clean up the mess he said the country was in, announced that fuel subsidy had run its course and become history at last. Applause.
But it soon turned out that those of us who applauded the president’s action were either naïve, foolish or both. We mistook a good political sound bite for a hard-headed decision. Fuel subsidy was not removed then and has not been removed even now. A brief history of the president’s to-ing and fro-ing on the fuel subsidy regime brings us face to face with unclear policies leading to policy summersaults that ill-speak of an administration given to speaking before it has examined and re-examined the pros and cons of critical national decisions. It is thus easy to see that we have been had all along. We have been led to believe in one thing while the federal government does something totally different in the case of the fuel subsidy. It is a mess and one the man who marketed himself as a mess cleaner has had problems with its clean up.
While the government dithered, walking back on its policy decisions, knowledgeable people in the industry, including the World Bank and the IMF insisted that one sure way to reflate the national economy would be the total removal of fuel subsidy. At a workshop organised by the office of the Accountant-General of the Gederation sometime in 2019, the then Emir of Kano, Muhammad Sanusi II, repeated what he had said about fuel subsidy a zillion times while he was governor of the Central Bank of Nigeria. In summary, fuel subsidy, he said, was bad business for the national economy and must be ended if we are to reverse our fortunes and perhaps give the crown of the poverty capital of the world to a country more deserving of the prize.
Always blunt, the emir said: “The country is bankrupt.” The IMF weighed in on the side of the emir. Everyone knew, to quote myself, that “the fuel subsidy was riddled with corruption. Ending it (would) mean close one avenue through unscrupulous Nigerians, through no fault of theirs, bleed the country.” Still, despite what the emir called sane advice, the “Buhari administration continued to dance around the problem.”
Sometime in 2019, the government sort of caved into the various pieces of advice on the profound lack of wisdom in maintaining the fiction that fuel subsidy benefitted the people. It announced the deregulation of the petroleum sector and the formal end of the fuel subsidy. The labour leaders were not amused – and said so in no uncertain terms – for perfectly understandable reasons. The rest of us thought the government had found the courage to do what everyone believed was the best for the country – and commended it for it.
Again, we had been taken down the overgrown garden path. Nothing had really changed. Fuel crisis during the Easter holidays of 2019, gave the game away. Fuel subsidy had been buried under a new bureaucratic shenanigan called “under recovery.” With this, the federal government stopped formally budgeting for fuel subsidy and would be right to argue that it had ended the subsidy regime. Under this new system, according to a Daily Trust editorial, “it diverts some proceeds from the sale of crude oil abroad to finance the import of refined fuel for domestic need, which it in turn sells at a fixed price to marketers.” The newspaper asked the federal government “to come clean” on this matter and tell the people the truth. Under the new mago-mago, the government was paying one trillion Naira a year to maintain the fiction of subsidy removal. It finds it difficult to take the advice by the Daily Trust to “come clean.”
So, here we are. On March 25, the Group Managing Director of NNPC, Mele Kyari, told us a new story. He said that the actual cost of a litre of petrol is N234; while the pump price is N162 -N165. This means, he said, that the corporation has been absorbing the difference between the actual price and the pump price. In monetary terms, it means the corruption is subsidising fuel to a stomach-churning level of N100 billion to N120 billion monthly. To put it another way, fuel subsidy is alive and well and is consuming, as always, a huge chunk of the national wealth.
The bad news, according to Kyari, is that the corporation could not continue to bear this crushing financial burden much longer; sooner than later, the people would have to bear the burden according to the dictates of market forces. Already, we are unofficially paying more for petroleum products; we would be asked to pay much more. This, to be sure, would bring new pains and deepen our misery. This could have been avoided if the government had stuck to the 2019 decision to deregulate the petroleum sector. And so, the mess continues.
The fuel crisis during the Christmas period of 2017 saw the president waving the scimitar, leading the battle against those he believed were inducing fuel scarcity during the festive season. In his 2018 new year broadcast, he said: “Our government’s watch word and policy thrust is change. We must change our way of doing things or we will stagnate and be left behind in the race to lift our people out of poverty.”
Buhari came into office in 2015 waving the banner of change and a new way of doing things. We bought into it, because we felt stuck in the old ways of doing things that had not made the positive impact we expected in our lives, both as individuals and as citizens. It was a change we yearned for; it was a change we expected to see because it would make our lives better. But we are yet to see the promised change six years after the man took up residence in Aso Rock. The old ways of doing things still prevail; except that we are hooked on what is known as borrow-borrow as a new way of burdening rather than managing the national economy.
The president’s failure to end the fuel subsidy does not necessarily mean that he has failed in his promise to change the ways we do things but it nevertheless points to the inescapable fact that the fuel cartel has obviously defeated him too and he is dancing to their tune by sabotaging his own policies. In an earlier column sometime in June 2019, I argued that “functional and affordable education; hospitals that make the people healthy at a cost they can afford; roads that are not death traps; a public transportation system that charge fares within the reach of the majority of the people; local foodstuff priced within their reach; constant electricity supply they can put to use running their small businesses; improved maternity health care delivery system so that the next generation of Nigerians are born healthy and live healthy, make more sense to the people than cheap fuel that is not even cheap.”
Those are the areas calling for change in the way we do things.
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