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Mr. President, Remove The Subsidies By Olountele Dokun / Buhari Blames Escalation Of Subsidies On Past Govt- Vanguard / Buhari Blames Wicked Manipulators For Escalation Of Fuel Subsidies - Premiumtime (2) (3) (4)
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Mr. President, Remove The Subsidies by Titilayodeji13(m): 4:27pm On Nov 22, 2015 |
IN its lead article, the influential
London weekly, The Economist,
quoting the late prime minister,
Tafawa Balewa, wrote, “this is a
wonderful day, and it is all the more
wonderful because we have awaited
it with increasing impatience,
compelled to watch one country after
another overtaking us on the road
when we had so nearly reached our
goal”. That was on October 1, 1960.
The wonderful day came almost five
and half decades later, on May 29,
2015, at Eagle Square, Abuja. I was,
happily, there.
Since 1960, Nigeria, the “most African
country”, slid into near failed state as
one military regime after another, a
civil war and successive kleptomaniac
civilian and civilian governments
interlaced. The single common thread
among all past governments, civilian
and military alike was corruption.
Our country, year after year, is
ranked among the ten most corrupt in
the world.
Subsidies on petrol cost the
government a whopping $6 billion
(1,200 billion Naira) annually, some
NGN9,000 yearly for every Nigerian.
It provides the biggest opportunity for
corruption to thrive. The subsidies
are stolen as the subsidised fuel finds
its way into the black market or
smuggled to neighbouring countries
where it fetches higher price. I bought
only yesterday, at a station on
Murtala Mohammed, Ilorin, with
ease, petrol at NGN110/liter. Drive
round the town at major marketers
stations, idle attendants tell you
nonchalantly “no fuel”.
But perhaps, the most compelling
reason to remove the subsidy is its
hindrance to investment in the
downstream sector. Solidarity with
anti-apartheid and anti-minority
struggles in South Africa and the then
Southern Rhodesia (now Zimbabwe)
led to foolish nationalization of the
downstream sector in the late 1970s.
British Petroleum (BP) became
African Petroleum (AP) and Shell
became National Oil. Today, these
entities are back in private hands
under bizarre and dubious
privatisations that saw them sold to
inexperienced and incompetent
Traders unwilling and unable to
build any refinery, but happy to
import and claim subsidy.
Remove the subsidy and dismantle
attendant price control of petroleum
products private refineries would
balloon and the country would rightly
no longer, perhaps, export one barrel
of crude. Competition for market
share would inevitably bring down
prices.
If anyone is in doubt, take a look at
what happened to the telephone
business. NITEL, a state monopoly
prior to deregulation, operated a
mere 400,000 lines (for perhaps 100
million citizens) and for so long kept
us not talking to each other. You have
to pay its officials to have your
application processed. You woke up at
3am to risk your way to its call kiosk
to make an international call. Senator
David Mark, then a communication
minister, made the infamous remark
that “telephones were not for the
poor.” Alas, today, and thank God he
is alive, even destitute have
telephones.
Today, we import more than 80 per
cent of our premium motor spirit
(PMS), thanks to public owned
refineries in comatose most of the
time. But reduce the role of the state
in the economy as the system distorts
and thwart production. The market is
the best arbiter. The Soviet Union had
the world’s most educated and
disciplined and skilled workforce, yet
the system collapsed and gave way to
the market. All that lampooning and
rally against so-called IMF
prescriptions distort the facts. They
are worn out cries of the left
increasing becoming political lepers.
Russia, birthplace of central planning
and state hegemony gave way to the
market forces. Ditto China and even
that island of hard-core communists,
Cuba.
Take the shiny example at home here
of a tiny Exploration and Production
(E &P) start up that for and barely 10
years into oil and gas production. Its
mini-refinery at Ogbele, Ahoada East
Local Council, in Rivers State, it is
probably the only functioning
refinery today in the country. The
company (thanks to regulated pms)
refines only Automotive Gas Oil
(AGO). It (thanks to deregulated AGO)
sells its product at market price.
When its price is high no buyer shows
up. When its price is low, buyers
happily queue. The market is
supreme. The company increases or
reduces price at the whim of the
market. That’s what works. It
eliminates official permits- synonym
for corruption. Where ever and
whenever any one is sitting in an
office to exercise discretionary
decision on economic matters you
provide the perfect recipe for
corruption. Remove it. Let the market
sort it out.
All that talk about inflationary
consequences of petrol price hike is
pure scaremongering. It is built on
timid ignorance, irrational emotion
and crude politics. Commuter buses,
supposedly used by the poor,
consume less than 15 per cent of the
stuff. Most inter-state goods haulage
are executed by diesel engine trucks
whose fuel, diesel (AGO), is
deregulated. Despite the noble
intentions cheap petrol does little to
help the poor. Eighty per cent of
petrol is consumed by car-owning
city dwellers commuting to work and
the affluent rich families, some of
whom between them have halve a
dozen cars. They fret needlessly over
petrol price hike. The subsidy, alas, is
for the affluent few. Mr. President
remove it today.
Dokun, Consulting Petroleum
Geologist.
Writes from Ilorin. http://www.ngrguardiannews.com/2015/11/mr-president-remove-the-subsidies/ 1 Like |
Re: Mr. President, Remove The Subsidies by baralatie(m): 4:34pm On Nov 22, 2015 |
Unfortunately it is no longer as easy as is should be. The govt is not paying subsidy as of now,it is the reverse. |
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