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Fuel Subsidy Issue By JJ Omojuwa by dmighty: 8:54am On May 18, 2016 |
Japheth Omojuwa, omojuwa@gmail.com
Having spent a whole week in Germany
travelling through villages in Lusatia,
Brandenburg and attending lectures in
Berlin studying the German Energy Mix
for the purpose of understanding
lessons Nigeria could learn, today’s
article was meant to start a
conversation on that but one would be
missing an opportunity to address the
most pressing issue of the day: the
petrol price hike. The conversation on
the energy mix can happen at a later
date.
I have seen a lot of arguments around,
“Why are you supporting subsidy
removal now when you occupied Nigeria
against it in 2012?” It is a valid
question when asked by those who
intend to indeed know the rationale
behind such differing positions. There’d
be a zero need to address those who ask
the question, not because they indeed
want to know why but because they see
the question itself as a conviction of
your person because as far as they are
concerned, it does not matter what
changed, you simply do not change your
position on an issue. To this group of
people, to change your position, you
must have been paid – I even had one
refer to me as a low grade paid agent of
the government – because the fact that
the realities surrounding one’s previous
position have changed are not enough
to necessitate a change of position. This
article is not for those and their kind,
instead, it is for those who are indeed
interested in knowing one’s rational
position.
Former President Goodluck Jonathan
increased the price of fuel in January
2012 and President Muhammadu Buhari
did just that in May 2016. How can
anyone react differently to the same
action by these men? To a logical mind,
you then have to go beyond both
actions to “why they did what they did!”
What is done cannot be as important as
why it is done. The January 2012
increase was induced by the subsidy
payments of 2011 that crossed the N1tn
line. According to the Nigerian
Extractive Industries Transparency
Initiative, Nigeria paid N198.11bn for
subsidies in 2009, the sum went up to
N416.45bn in 2010 and then some
extraordinarily amazing thing happened
in 2011, the subsidy numbers against
reason shot up to N1.9tn! You need not
be an expert in Mathematics to see that
the 2011 number was way out of line.
We paid just N219.72bn in 2006 and
N236.64bn in 2007. What happened in
2011 to take the subsidy numbers to
celestial realms? It was the 2011
elections. Not only did President
Jonathan and his ill-fated co-travellers
fund his 2011 election from the subsidy
payments, they also depleted the Excess
Crude Account to $3m in 2011 from
almost $20bn in 2009.
This was what happened before January
2012. Something had to give. It was too
late to stop those who got the windfall
of N1.9tn from getting something
smaller the following year. The President
then decided to transfer the burden to
Nigerians. This was what Nigerians
rejected in 2012! This was why there
was a lot of argument on “Cut waste not
subsidy” and “Kill corruption, not
Nigerians” during the protests. These
amongst other issues were the
prevailing conversation. There is no
need to state that something similar
happened for the 2015 elections, only
this time, the money mostly came from
defence spending.
Bottom line; President Jonathan
increased petrol prices in January of
2012 because of the looting that had
happened right under his nose and
mostly for his own benefit. Several
probes proved this in different ways;
including the Nuhu Ribadu report, the
KPMG report, and the ill-fated Farouk
Lawan report that got shot down with
the active connivance of the then
Presidency. The people naturally
protested the fuel price hike of 2012
because all of these were apparent to
the general public. Despite the protests,
the government succeeded in raising the
fuel price. It set up a Subsidy Re-
Investment Programme called SURE-P.
The scheme was better known for the
scams committed under it than for
anything else.
What then is inducing 2016’s fuel price
hike? A global reality. Before addressing
this global reality, I must address the
failings of the Buhari government on
this issue. You cannot find a more
confusing situation than the dollar
exchange regime. We have an official
exchange rate of N199/$1, then petrol
importers now have an exchange rate of
N298/$1 while the parallel market
continues to speak in different tongues;
on Tuesday, it was about N350. Such a
state of chaos and absolute uncertainty
helps no one, certainly does not
encourage private investment. The
current FOREX regime is nothing but a
form of subsidy for the rich and
privileged, it has to end! Apart from this,
I will reecho what Dr. Omano Edigheji
stated in his recent article, “Where is the
APC government’s Development
Agenda?” How long are we going to be
using piecemeal moves to fix a system
that obviously craves a structural
change? Something has to give!
Back to the global reality, Venezuela
has increased fuel prices by 6000 per
cent. You read that right, six thousand
per cent! It has also devalued its
currency, the Bolivar. The government
then increased the minimum wage by 30
per cent. This sounds amazing until you
hear the new minimum wage is now just
about $13! That is N4,550.00 at N350/
$1. Venezuelans despite the increase
apparently still get to buy fuel at the
world’s cheapest price but the reality
should not be lost on anyone, arguably
the world’s most socialist country today
has been forced to make adjustments,
increasing fuel prices for the first time
since 1996!
Qatar Petroleum laid off some 3000
people in 2015. RasGas, the gas
company, did its own firings. Qatar
Museum and other companies including
the almighty AlJazeera have had to
reduce their staff strength. The sackings
continued into 2016.The Abu Dhabi
National Oil Company laid off 2000
staff members about two weeks ago. In
Kuwait, salaries and other benefits are
being reduced while the oil company is
sacking those even less fortunate.
Kuwait is OPEC’s third largest producer,
also holding eight per cent of the global
oil reserves.
Hardly any Nigerian conversation ends
without comparisons to the United
States, despite the obvious disparities in
our realities. According to Houston-
based Graves and co., Global Oil and
Gas job losses have topped 350,000. As
of the last report, it stood at 351,410
and counting. Between October 2014
and January 2016, the US alone
accounted for nearly 100,000 job losses
in oil and gas and supporting segments,
understandably, more than half of these
job losses are from Texas. This is
according to the US Bureau of Labour.
There are more examples to pick from
but having outlined the reality in five
countries above, anyone who cannot see
a trend has either simply refused to see
it or does not have the ability to see it.
These global realities are one thing,
Nigeria’s Dasuki-Dezianian
exceptionalism is another. This country
has been stolen dry to its bones.
Nigerians have been left mostly poor
and with frail hope. Despite selling oil
above $100/barrel for the better part of
the last half a decade, we went on a
splurge where “people sat down and
shared the money as if it was lunch or
dinner.” We are here today with the
price of oil and the attendant exchange
rate dealing us twin blows! Surely,
something has to give! Or the house will
come down fast.
No matter what happens, the poor must
be protected. The government must
make sure its N500bn intervention plan
reaches the poorest of the masses; we
cannot afford another Dasukian reality
here. Apart from this, Nigeria must be
intentional about strategically pursuing
a structural change in its economic and
development agenda. Even Saudi Arabia
is advancing plans to restructure its
economy and compared to Saudi Arabia,
we earn peanuts from oil, even when we
were earning a lot.
In summary, the 2012 price increase
was necessitated by election-induced
corruption; the 2016 fuel price increase
is being necessitated by the reality of
oil’s dwindling fortunes globally and the
effect it is having on foreign exchange
earnings and exchange rates added with
Nigeria’s poor choices of years past.
One cannot protest like one did in 2012
for President Buhari to go after thieves,
he appears more desperate to jail them
than the average Nigerian. These are my
explanations for those who were
genuinely asleep and required
assistance to be woken up to smell the
coffee. Those pretending to be asleep
need no such help. 1 Like 1 Share |
Re: Fuel Subsidy Issue By JJ Omojuwa by Histrings08(m): 9:22am On May 18, 2016 |
Pfft |
Re: Fuel Subsidy Issue By JJ Omojuwa by incomintop: 9:32am On May 18, 2016 |
Thrash |
Re: Fuel Subsidy Issue By JJ Omojuwa by magicalx(m): 9:35am On May 18, 2016 |
Hypocrite! You are giving yourself a good reason to sleep well at night. 1 Like |
Re: Fuel Subsidy Issue By JJ Omojuwa by Built2last: 9:47am On May 18, 2016 |
hypocrisy in high heavens everywhere in this nations |
Re: Fuel Subsidy Issue By JJ Omojuwa by Stalwert: 10:00am On May 18, 2016 |
The January 2012 increase was induced by the subsidy payments of 2011 that crossed the N1tn line. According to the Nigerian Extractive Industries Transparency Initiative, Nigeria paid N198.11bn for subsidies in 2009, the sum went up to N416.45bn in 2010 and then some extraordinarily amazing thing happened in 2011, the subsidy numbers against reason shot up to N1.9tn! Someone has a PHd in defrauding the govt no wonder he is called the ineffectual buffoon how else can one explain this sort of heartless criminal behavior? Thunder strike any daft wailing zombie that quotes me to defend Jogogoro the great buffoon of our time |
Re: Fuel Subsidy Issue By JJ Omojuwa by LesbianBoy(m): 10:05am On May 18, 2016 |
magicalx:Don't mind the stoopid idiot! God punish him, buhari and least I forget his supporters here on nairaland |
Re: Fuel Subsidy Issue By JJ Omojuwa by Hasawa(m): 10:23am On May 18, 2016 |
Booked! |
Re: Fuel Subsidy Issue By JJ Omojuwa by fitzmayowa: 10:29am On May 18, 2016 |
Re: Fuel Subsidy Issue By JJ Omojuwa by fitzmayowa: 10:31am On May 18, 2016 |
Oga omojuwa no one is asking you to justify your position or opinion, your position or opinion is yours and yours alone... Spare us this your crappy epistle... |
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