As Nigeria gradually pulls back from the brink of the ‘Petrocalypse‘, it is just the latest example of why the petroleum sector of one of the world’s biggest exporters needs urgent reform.

Between the petrol marketers, Nigerian government, the long lines for overpriced petrol and the endless power cuts, millions of people have been caught in the middle, without alternative means of generating power to make life bearable.

Having a whole country held to ransom by a few marketers has a national security dimension. While the scarcity lasted, banks, radio stations and other businesses were forced to close early, or not open at all, and phone and Internet companies faced disruptions of service. Had it continued, the ability of the entire country to communicate and do business would have been thrown in jeopardy.

Some have blamed this latest scarcity on the continued existence of the petroleum subsidy–which the government uses to keep petrol pump prices artificially low. But it also means the government incurs a hefty bill trying to make oil marketers whole when marketers have to sell below market rates. These same observers blame the January 2012 protests called ‘Occupy Nigeria’, triggered by president Goodluck Jonathan administration’s decision flawed attempt to end the subsidies. The view is that had the subsidy been removed, then the marketers would not wield so much influence.

This is wrong for a number of reasons.

The subsidy question

On January 18th this year with crude oil prices less than $50 a barrel and the subsidy bill at nearly zero, the Nigerian government, rather than remove the subsidy like it always argued, further reduced prices at the pump by 10 Naira ($0.05) a litre as elections approached. Prices have picked up since then and the currency has been devalued, which means that the subsidy bill has spiked to over $1 billion. The government has struggled to pay that bill.

Secondly, most Nigerians agreed back in 2012 that the subsidy had to go, but the Jonathan administration had no credibility to carry out such painful reforms. There was a lack of political will to lead by example through cutting wasteful expenditure in the government and prosecuting corruption. The feeling was that any more water poured into a basket would just waste away like always. Subsequent events have vindicated that position, and Goodluck Jonathan was seen as soft on corruption, a factor that was a major plank which led to his defeat in the elections.

Muhammadu Buhari, who takes the oath of office this weekend, has no such credibility deficit. In addition to a personally austere lifestyle, he is perceived as much harder on corruption than the man he is replacing. As such, his government will have much more latitude to do what it feels it must to fix the situation, which may not may not include removing the subsidy.

In addition, Buhari has experience in the sector. He was chairman of the national oil company NNPC and later minister of petroleum in the late 1970s, during which two of Nigeria’s four refineries were built. None of those four refineries are currently fully functional.

This latest scarcity of petroleum products is one of the worst many can remember, because almost no one can remember a situation where major businesses had to close early and flights were grounded due to a lack of diesel. When you add the revelations of the NNPC forensic audit–which indicted the corporation and called the way it operates unsustainable – as well as the problem of kerosene subsidy, Nigerians are tired and clearly desire a lasting solution.

Therein lies the opportunity for Buhari’s government.

Source: http://qz.com/412471/nigerias-goodluck-jonathan-just-did-incoming-buhari-a-big-favour-with-the-fuel-crisis/

Really

Interesting...

I guess the plan backfired. We can as well kiss subsidy goodbye.

Goodbye jona goodbye madam peace goodbye madueke u are going home u know that primary school rhymes

Secondly, most Nigerians agreed back in 2012 that the subsidy had to go, but the Jonathan administration had no credibility to carry out such painful reforms.

Technically speaking, what Jonathan did was to increase petrol pump price from N67 to N147. If it was indeed removal of subsidy, then why FIX the new price? Why not allow market forces determine what the price should be?

Worse still, no one knew at that time the template PPPRA used in arriving at that figure.

After allowing subsidy claims to rise from less than N400B in 2009 to over N2T in 2011, the President still had the effrontery to punish Nigerians further by increasing petrol price by over 100% under the guise of fuel subsidy removal.

This is Mismanagement and Improbity at its peak!

Muhammadu Buhari, who takes the oath of office this weekend, has no such credibility deficit.

Same thing was said of Olusegun Obasanjo in 1998/99. In fact Baba Obj in 1998 was "poorer" than Buhari of 2015 but became a very wealthy man and ran the most useless democratic administration. He set a very bad democratic precedent and he's a mentor of BUHARI

In addition to a personally austere lifestyle, he is perceived as much harder on corruption than the man he is replacing

Is he the same man that made this statement...
"All the allegations levelled against the personality of the late Gen. Sani Abacha will remain allegations. It is 10 years now, things should be over by now." “ten years after Abacha, those allegations remain unproven because of lack of facts”.

Is he the same man that gave Amaechi clean bill of health?

Is he the same man that received millions for his campaign from corrupt element?

Is he the same Buhari that appointed a Corrupt Sylva to head his committee?

You people should spare Nigerians these sermons and get to work. Enough of the rhetoric! Campaign is over

barcanista:
Same thing was said of Olusegun Obasanjo in 1998/99. In fact Baba Obj in 1998 was "poorer" than Buhari of 2015 but became a very wealthy man and ran the most useless democratic administration. He set a very bad democratic precedents and he's a mento of BUHARI

Is it the same man that made this statement...
"All the allegations levelled against the personality of the late Gen. Sani Abacha will remain allegations. It is 10 years now, things should be over by now." “ten years after Abacha, those allegations remain unproven because of lack of facts”.

Is it the same man that gave Amaechi clean bill of health?

Is it the same man that received millions for his campaign from corrupt element?

Is it the same Buhari that appointed a Corrupt Sylva to head his committee?

You people should spare Nigerians these sermons and get to work. Enough of the rhetoric! Campaign is over

Cry cry baby!

MyMouth:

Cry cry baby!

Whosoever questions Buhari's silliness is crying?

The very corrupt have surrounded Buhari.

haba

noblezone:


Whosoever questions Buhari's silliness is crying?

The very corrupt have surrounded Buhari.

haba

OK! But first of all, I want you to checkout the person who is complaining. The same barcanista that was soliciting for bribe in the name of " protection seeking" is not the right individual to talk to anyone about corruption!

am still waiting to see the miracle buhari will perform.3month is not far

barcanista:
Same thing was said of Olusegun Obasanjo in 1998/99. In fact Baba Obj in 1998 was "poorer" than Buhari of 2015 but became a very wealthy man and ran the most useless democratic administration. He set a very bad democratic precedent and he's a mentor of BUHARI

Is he the same man that made this statement...
"All the allegations levelled against the personality of the late Gen. Sani Abacha will remain allegations. It is 10 years now, things should be over by now." “ten years after Abacha, those allegations remain unproven because of lack of facts”.

Is he the same man that gave Amaechi clean bill of health?

Is he the same man that received millions for his campaign from corrupt element?

Is he the same Buhari that appointed a Corrupt Sylva to head his committee?

You people should spare Nigerians these sermons and get to work. Enough of the rhetoric! Campaign is over

Who among the GEJ and GMB has integrity issue? Based on their antecedents, we have a fair idea who we can trust with our money.