BestGovernance:
Subsidy Removal and Crusade for Deregulation.


There has been uproar from the public about sudden hike in price of PMS popularly called petrol with justification from Federal Government that end has come to subsidy on PMS.

Many people hinged their rejection to it based on resultant forces emanated from Covid19 pandemic, where people economy strength have been weakened globally. So, to them it is believed that this action came at the wrong time. Unfortunately, for our government it is the right time for us to let it go due to economy meltdown and this has been the narrative for both past and present government whenever there is cash crunch.

It seems our government is ready to dance to the tune of our creditors who are hellbent on this narrative since Prophet Mathew Obasanjo days. These people don't care about refining our oil locally but want us to treat symptoms without uprooting the cause.

Personally, I belong to the camp of deregulation of this sector not only world price reflection at our local filling stations. Noting that PMS is a sensitive item in our basket and any tinkling with it will take toll on our production costs and purchasing powers.

So subsidy removal without considering other indicators that are major in deregulation of the sector will remain a bitter pill for the masses to swallow and government might soft pedal to continue the monstrous bill.

Firstly, we don't refine the PMS we are consuming. Secondly, our refineries are in shambles with little or no production and there is no alternative. Also, our transport system and small scale businesses majorly relied on PMS and no alternative. We also don't have legislative framework to hasten our local refineries for action. Sincerely, PIB has been dancing Asonto before our government, both past and present. So how can we be allowing these oil majors to take oil from our land to their refineries outside our shore to refine. It is a slothful man that doesn't roast his game.

Therefore, deregulating price of PMS while all these factors remain unattended to will be a huge kneel on innocent citizens necks as we are already gasping for breathe. This current hike shows that government just want to pass the burden to innocent public while nothing happened to our rulers extravaganza. There is no part being shared by our political elites and you can't continue to suppress our purchasing powers while you live in affluence.

For subsidy removal to work we need to refine our consumption here, start selling our raw materials in refined states to avoid FX shortage, oil majors should be compelled through a legislative framework like PIB where 50% or more of what they explore is refined locally, NNPC should allow private companies to thrive in the sector from upstream to midstream and downstream and our government officials should live within our means.

However, if we pitch tent with this pricing crusade, we might give room for same subsidy cartels that will find importation of PMS lucrative than building refineries here. For instance, if oil price jump to $100/barrel tomorrow, a litre might go as high as N500 and these importers might become monsters that can frustrate refining business.
I doubt if this pricing deregulation can work without aforementioned factors.

Ifedayo Obi.