For the love of Nigeria, Jonathan should resolve the fuel subsidy debacle!

A lot has been said with respect to the fuel subsidy impasse we currently face as a nation. However, it appears we are not listening to one another. Government sees the rationale for the removal of fuel subsidy but cannot convince Nigerians to go through the pain. Nigerians on the other hand believe they may not survive the pain or the gain may just never come. To many, the Jonathan administration is eschewing its responsibilities to cater for the welfare of the Nigerian people by tackling corruption head on, securing our borders and dealing with the many externalities that have led to a monumental increase in the volume of PMS (petrol) consumed by Nigerians and the attendant increase in the volume of subsidy paid by government in the last 2 years Jonathan held sway.

To be clear, there are just two broad categories of PMS consumers in Nigeria: vehicle owners (be they rich or poor) and the poor/emerging middleclass who have to power their homes and small businesses using petrol generators due to the poor state of electricity supply in Nigeria today. AGO (diesel) which powers our industries, big companies and the homes of the rich had already been deregulated before now. Accordingly, if the generator you use in your home is fueled by PMS, you are a poor Nigerian (think about it, rich Nigerians use diesel generators) and you would be impacted by the deregulation of PMS. Government has also not tried to disprove the fact that the only benefit derived by Nigerians from Nigeria and its governments is ‘cheap’ fuel. We lack roads, security of life and property, water, electricity, infrastructure, etc. But we have government with officials who earn salaries and unjustifiable allowances funded from our taxes and collective wealth as a nation.

Interestingly, government seems to understand the challenge with pushing through this PMS deregulation agenda and has succinctly put it at the door step of the limited trust Nigerians have for the government of the day. VERY TRUE!
But why would I trust Jonathan’s government? A government that in all ramifications is insensitive to the plight of its people? A government where our foreign reserves have been depleted by more than half and we cannot see the impact of expenditure in terms of power, infrastructure and better quality of life for the people? A government that is bloated and has super high recurrent expenditure which it only seeks to reduce by 1 percent every year for the next 4 years? A government that expects poor Nigerians to obtain new drivers licenses and vehicle number plates, all before August this year? A government that has highlighted intentions to introduce toll gates without thinking or realising that there are no roads in the country? A government that has failed to deal effectively with the Boko Haram threat in Nigeria but has told us to live with it? A government that has failed to keep its own promises? Clearly, government is agitated by the ongoing protests and labour’s planned strike and is already taking desperate measures.

So, what should be done? A lot has been suggested by a broad section of Nigerians that mean well for the country. However, we are dealing with a government that is either cut in its ways or suffers from a mental block. My position: I support the deregulation of PMS! However, certain things can be done by a reasonable government to PROVE that it is sensitive to its people and concerned about their overall welfare.  To my mind, three things are fundamental.

First, charity should begin at home. Why should the people be in pain while in government, it is business as usual. Nigerians are more incensed about the insensitivity of government than they are about the increase in fuel prices. I buy my food. Why should the president not buy his? Why budget almost a billion for the feeding of Aso Rock in one year? Do these people not earn salaries? Why should the people endure the pain while those in government continue to engage in wasteful spending and the misappropriation of our taxes and collective wealth?
I would support the president when he starts buying his own food, takes a pay cut of 30 to 50 percent and implements same for all senior officials of government and political office holders. If government is sincere, this should be possible. We can save almost as much as we will from deregulation when government officials including the National Assembly take a pay cut. There are many ways to skin a cat. But will we try?

Second, a phased approach to deregulation, I believe, is the way to go. The government needs to articulate and communicate a roadmap for doing this in like manner as a previous government did with the Multi Year Tarrif Order (MYTO) which has phased the increases in the price of electricity in Nigeria. The phased deregulation must however be tied to specific milestones which, among other things, must of necessity include the planned increases in the provision of electricity supply to the Nigerian people based on the power sector roadmap. For example, there is a strong and direct link between the volume of PMS consumed in Nigeria and the volume of electricity supply in the country – most poor Nigerian homes don’t even own a car but a more significant proportion run some form of power generating system. In this light, a 20 percent increase may be tied to the achievement of 8 hours of constant power supply to all Nigerian homes. If government is positive about the power sector roadmap, it should be open to doing this as it further reflects a balanced view and sensitivity on the part of government.

Third, there has to be significant restructuring of the oil sector including the NNPC and DPR and the entire oil extraction, production and supply value chain. This recent attempt at deregulation is at best shameful since it makes no sense to deregulate and still dictate prices. Obviously, most fuel stations today sell above the 141 naira prescribed by the PPPRA and nothing has, or will, happen. With deregulation should come the scrapping of PPPRA and Petroleum Equalisation in Nigeria. Given that NNPC and DPR are cesspits of corruption, it takes a government with the WILL to deliver on this. Unfortunately, people in government are beneficiaries of the corruption that has pervaded the oil sector. Corruption, collusion and smuggling of products across our borders need to be dealt with head on by government. If government keeps making excuses and does not do its job, who will?

I strongly believe that Nigerians will support deregulation when government is sincere, more sensitive and the deregulation is better planned and phased. When deregulation is tied to the dividends government has promised, when government implements a huge cut in the cost of running itself and when we deal decisively with the corruption within our system, we will move another step forward.

There is still a small opportunity that Jonathan will wake up and think clearly.  For the love of Nigeria, Jonathan should give Nigerians a ray of hope!