baridamben:
It's been so terrible the past few days, as the queue grows and the waiting goes, with the people scrambling to buy the black gold, even at astronomical cost of 300 to 400 naira per litre, and under scorching harmattan sun, the dreaded fuel scarcity looms... It seems we're only now just opening some of the parting gifts that our uncle Jonah bequeathed us in the dying days of that ill-fated administration.
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We've known, of course for a while now, that In that little gift envelope was a whopping 413 billion naira of debt owed to Major Oil Marketers (MOMAN) who import oil for Nigeria. Yes, I know... That you would begin to wonder why the government would owe so much to these people after all the money we got from over 5 years of that windfall. But it was not normal, it was an artificial creation of that infamous cabal or, simply put, the owners of MOMAN, and aided by the government. Subsidy claims were cooked-up in a grand conspiracy against the Nigerian State... the NNPC, CBN, ministry of finance, accountant general of the federation, and every single person who should make sure it never happens, all conspired against Nigeria to aid and abet one another to arrangee the book in such a way that the nation, Nigeria, would be owing these people billions and billions of naira in subsidy claims for petrol they only delivered on paper, but never in reality. And all these things happened, even as our oga at the top stood idly by.
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Let's jog our memory a little bit and recall once upon a time, at least some seven months ago, when the major oil marketers were worried, that since the economy was giving Okonjo Iweala some serious overdose of high BP, and Buhari was claiming to not know what subsidy is.. So they thought to themselves, that if Jonathan could not pay the debt in an oil boom, is it Buhari who is claiming not to know what subsidy is that would now pay them when the price of oil has fallen and the economy is broke? So they thought, it was time they held the nation by the balls and get their money when they could. And true to it, they held our pair of balls and squeeze it really haaard, the result was a tumbling economy that shook the whole nation like an earthquake. Banks were operating for half a day, manufacturers were packing up and running away from the sinking ship that is Nigeria, even MTN of all people threatened to shutdown for lack of fuel to power their mast. Power generation dropped down to just a little over 1000MW as the economic wheels practically came to a screeching halt.
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All this happened, until the timely intervention of the senate committee on petroleum, headed by a certain senator Magnus Abe, who salvaged the situation by begging the oil importers to resume operations that the incoming APC government would pay the debt. And the importers yielded after extracting a commitment from the then incoming president, GMB, who promised to pay them the money in his own administration.
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Now, Buhari has taken over, he's cleaning the petroleum industry, discovering some of the frauds and cancelling some of the oil swap deals to review them in line with current economic realities and global best practices. He has reduced the number of importers, or subsidy thieves if you like, from 43 to 29 to block leakages, and he's implementing other reforms. But one of the most critical reform is that the NNPC will, in 2016, begin to import fuel directly on its own, and no longer through those importers who we're indebted to now. This is a beautiful news for Nigeria, sweet music to our ears even, but a terrible-terrible news for the subsidy thieves, that government is making a long term plan to do away with them.
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So, as soon as the NNPC made that announcement, those importers, who are themselves some of the most powerful men in this country (Wale Tinubu, Mike Adenuga, Femi Otedola, etc), decided to fight back... They decided to ask for their money, then perfected plans to pretend as though they didn't have any kobo with which to import fuel, unless government gives them their money. The government got wind of this plan and quickly decided to pay them, 413 billion naira, an amount not budgeted for which would've been appropriated in the 2016 budget. Government has again been cornered by powerful forces and must cough out so high a figure in a crippling economy. So Buhari approved it, and the NNPC quickly made the announcement to assure them that their money is on the way, to pre-empt what we're seeing today, with the only thing remaining being a bill to the senate to that effect. If the senate does not approve, the president cannot direct the CBN to credit their account.
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But the oil importers would not be deterred, they don't care about the government or the people... They've never cared, they're the ones who made sure our refineries didn't work so that they would continue to stay in business and import fuel. And now Buhari is planning to get them out of business, so they must take their pound of flesh. If they crippled the economy, they thought, then maybe Buhari would negotiate. They pretended as though they didn't even believe that the government had the money to pay them, that the announcement was just a ploy to force them to keep importing, so they quickly announced to the nation that they have not seen any money, that their foreign exchange differentials has practically vanished hence they can't resume importation unless they get the alert.
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So, as they were not importing, the nation began to run on reserves... NNPC said they have enough reserve to carry the country for some weeks until the senate approves the payment of the debt. The Tank Farm owners (JEPTFON), those who store imported petrol and sell to depot marketers (DAPPMA) to distribute to the whole country, reasoned that if the importers (MOMAN) were not giving them fuel, that their tank might run dry, hence decided to increase the price at the depot, especially the privately owned depots, even against DPR regulations. And with high price at the depot comes high price at the stations. This is just the market responding to market forces, when supply is low or practically non-existent as importers (MOMAN) were no longer importing, and public demand is high, then cost is expected to rise. It's as simple as that. And the funny thing is, even though the price at the depot were normal, depot petroleum marketers (DAPPMA) would still continue to hoard the product or sell at exorbitant rate as long as major marketers (MOMAN), or importers, are not adding to what is at the depot. This is why no matter what DPR or even the petroleum minister says, we should not expect to buy fuel at a normal rate until the bank account of the oil importers hit "credit alert".
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The supplementary budget was sent to the senate on Wednesday, and all the major stakeholders in the industry held a meeting yesterday to resolve the crises . Although I'm not holding my breath until I'm told that the marketer's bank account have been credited, I'm highly confident that the issue will eventually pass away as soon as possible. But let us not forget why we have this problem in the first place, that there is massive corruption in the land conveyed in the vehicle of powerful forces. That Jonathan was not able to handle them, instead he fatten them up. And to be fair to him, he wasn't adequately prepared for such responsibilities. Never again should we allow those who are not well cut-out for leadership to mount the institution of governance, especially at the highest level. No matter how good their intentions were, you can never send a boy to do a man's job. We must therefore restructure our electoral reforms to make it impossible for any individual to be foisted on the people. I wouldn't deny some of the benefits that Nigeria derived from his weaknesses, but if he were a resolute leader at least, then the conditions that led to the fuel crises in 2012 would not have happened. If he didn't owe hundreds of billions of naira in an oil boom, and encouraged the situations that led to such debt, then we wouldn't be in this mess today. He left us with a country that was literally on life support - a sinking ship - and we're working hard to steady the ship. A country that couldn't pay salary to its workers, and even as we've steadied that ship, governors are now saying that they can no longer pay 18,000 naira minimum wage. These are the legacies of Jonathan, and we must not forget in a hurry, even as he celebrates his birthday alone.