By Ugo Onuoha
THE depot price of premium motor spirit [PMS] or simply petrol climbed to N1,900 in parts of the country last weekend. That was hours after the federal government announced that it had reduced per litre price of petrol to N1,350 in its own Nigerian National Petroleum Company Limited [NNPCL] retail outlets for 30 days. Government’s spokesperson struggled to distinguish between discount and subsidy, and made sure to brand citizens who disagreed with his charaterization as economic illiterates. It did not matter that the NNPC said the government lied about the discount it was offering and its duration. It said it was its inactive and that the federal government was a meddlesome interloper. The weekend petrol price spike may yet come down in spite of what we have come to know about our country that whenever prices go up they hardly come down. But the last weekend depot price of petrol must come down. Because that price was not sustainable. It cannot hold. If depot price knocked on N2,000 per litre, it could only suggest that retail price would be above N2,000/litre in the affected parts of the country. That price per litre cannot stand, not today and not in the forseable future. Otherwise, the cataclysmic collapse of the economy [which is at the brink already], and the country would be immediate, not later.
The cruel irony was that the steep depot prices of petrol which ranged from N1,700 – N1,900 a litre were being reported from the Niger Delta region which is home to a disproportionate quantity of the country’s crude oil deposits. Nigeria has been producing and exporting barrels of crude oil for the better part of six decades. Prospecting, extracting, and exporting of hydrocarbons have left deep scars on the indigenes of the Niger Delta, including the devastation of the environment of the area. The main occupations of the indigenes of the region, fishing and agriculture, have virtually been wiped out. The gains, if any, of the people from that resource cannot be said to be commensurate with the destructions. The creation by the federal government of OMPADEC [Oil Mineral Producing Areas Development Commission] in 1992, and the successor NDDC [Niger Delta Development Commission] in 2000 have not significantly positively impacted the lives of the people.
Nigeria is one of the leading producers and exporters of crude oil. In spite of what appears to be an ebb in the inflow of fresh investments in the oil industry, it has been established that this country holds a proven reserve of crude oil and condensate of approximately 37.01 billion barrels. A breakdown shows that crude oil accounts for 31.09 billion barrels while 5.92 billion are gas condensate. Nigeria is ranked 11th globally in oil reserves which is about 2.1% of the world’s total.
If our country sustains production at between 1.5 to 2 million barrels per day of crude oil and liquids, the reserves could be exhausted within the next two generations or sixty years, unless there are new investments and fresh discoveries of deposits. This dire prospects is one conversation that Nigeria’s rulers are not yet interested in discussing. Unlike Norway and a few other oil producing countries, our country spares no thought for how successive generations of Nigerians could be partakers and beneficiaries of this resource endowment.
It’s instructive that while some crude oil endowed countries are measuring their savings from oil and other natural resources in hundreds of billions of dollars, and even in trillions of dollars in their sovereign wealth funds as is the case with Norway, Nigeria salivates over the pittance in its sovereign wealth fund and miserly 55 billion dollars in external reserves. As with crude oil, the country’s ruling elite is shifting its focus to natural gas with which our country is also enormously endowed. Nigeria is reported to hold about 215.19 trillion cubic feet [TCF] of natural gas reserves.
In addition, our rulers have recently been doing what could pass as a quid pro quo business with Nigeria’s much sought after rare earth deposits, including lithium. In that regard, our country in September reportedly signed a 700 billion dollars agreement with the United States of America. The deal was signed publicly on the sidelines of the United Nations General Assembly [UNGA81] in New York, but the contents of the deal are still shrouded in secrecy. With Nigeria’s president, Alhaji Bola Ahmed Tinubu, closet deals are not uncommon. Opacity marked the award of the about N15 trillion contract [the contract sum is not really known] Lagos – Calabar coastal highway to the company of the president’s business partner; the award of the multibillion Naira Kebbi – Badagry [in Lagos state] super highway; the reported handover of Nigerians’ tax data to a French firm; and, the compilation of a shadowy register for conditional cash transfer to hundfreds of thousands of the poorest of poor households in Nigeria. Billions of Naira have reportedly passed through this pipeline though many Nigerians are yet to identify the beneficiaries of the federal government largesse.
It’s ironic that the official sum of N419 billion said to have been transferred through the ‘Renewed Hope’ social register thus far bears a striking resemblance to ‘’419’’ normally associated with notorious advance fee fraudsters in the country. There is a strong and almost irresistible attraction to do so, but there’s no suggestion here that the administrators of the scheme are perpetrating brazen fraud and daylight robbery on Nigerians. Unofficially the sums which reportedly moved through that pipeline ostensibly to the poor and vulnerable ranged from N750 billion to N1 trillion within the first three years of the Tinubu regime. In spite of the programme, or even because of it, more Nigerians have kept falling between the cracks and into grinding poverty daily. Our country has stubbornly remained the poverty capital of the world since 2019 under the APC regime of the affliction of Nigeria, the late President Muhammadu Buhari.
Reports on the conditional cash transfer programme indicate that 71% of the disbursements of the N75,000 to each beneficiary, paid across three tranches of N25,000, went to indigent indigenes and residents in the northern parts of the country, while 29% was paid to the poor in the south. Another irony is that in spite of the seemingly disproportionate concentration of alleged payments to beneficiaries in the north, the poverty in that region has kept getting worse. Can it be ascertained that the alleged cash transfers got to the intended beneficiaries, including those in what now appears to be permanent camps for internally displaced persons [IDPs] dotting the north? Nigeria may just be the only country in the world which is not formally at war nor ravaged by any natural disasters, but hosts permanent IDPs. What a shame? What a tragedy?
Back to the petrol price discount in government’s retail outlets.There was no doubt that when one of the presidential candidates hinted at a reversal of the three-year-old ‘’subsidy is gone’’ reckless statement on May 29, 2023, shockwaves swept through the ranks of the regime. How do you know this? The usually taciturn President Tinubu who relies more in using proxies to address issues sprang quickly to his feet to mock that candidate, and to brand him an economic illiterate. He said that one of his rivals proposal on an alternative petrol subsidy was a ‘’demonstration of serious ignorance on governance and economy’’. As things unfold it’s becoming obvious to Nigerians, who had not known these past three years, that the real economic illiterate is Tinubu. His illiteracy is compounded by the fact that it is wrapped in, and with, deceit.
Otherwise, how do you explain the deceptive claim by this regime that the token reduction on the pumphead price/tax of petrol would be at no cost to the government and citizens? Who owns the NNPC? Are they not Nigerians through the federal government? The profit margins that the regime has said it would waive over whatever period belong to Nigerians, not to the NNPC. Waived margins would translate into loss of profit which could encumber the ability of the corporation to reinvest in the business. It could also hamper the ability of the NNPC to secure its pipelines which it claimed it used an eye-popping and scandalous N11 trillion to do over three years under this apparently rogue-regime. There is also a possibility that the corporation would, going forward, default in statutory remittances to the federation account. It would have a ready excuse. And this would deny state governments of their hefty allocations from the commonwealth. Increased allocations? Not really. What the state governments are celebrating is the illusion of money. More money, less value in real terms.
As we have consistently said Tinubu is contemptuous of Nigerians. His contempt for people is a carry-over from Lagos where he has been the de facto governor since 1999. So, he’s not just coming to the realisation of the privations his reckless economic policies have visited on Nigerians these past nearly four years. He didn’t care. He still does not care. He’s pretending to be concerned because we are at the eve of an election in which he’s seeking a second term.
The recent petrol price discount or subsidy is designed to hoodwink the people. It’s a mechanism for vote buying. He realised that anything to reduce the pumphead tax he whimsically imposed on Nigerians since 2023 which his rivals to the presidency have been advocating for recently resonates with a majority of prospective voters. That’s why he wants to latch onto it by pulling a wool over the eyes of citizens. Because of his undisguised contempt for us, he believes that throwing a token the way of the people would be enough. For almost four years Tinubu has put Nigerians through hell. For him the meagre discount/subsidy for 30 days which could be rolled over until the January 16, 2027, presidential election would adequately compensate for the sufferings citizens and corporations have been put through since 2023. Heck, no.
By the way, Tinubu knows that in addition to his petrol discount being a token and a fraud, that it will not work and it will not positively impact on the lives of the majority of suffering Nigerians. Available data shows that the NNPC operates just over 900 retail outlets. Their outlets are located in urban centres and the highways. None is consciously sited in rural areas. The NNPC outlets represent less than 5% of the country’s estimated 23,000 total filling stations. In effect, the majority of petrol stations in this country are owned and operated by independent and major private marketing companies. What other evidence do you need to accept that Tinubu’s petrol discount offer was a token deliberately designed to hoodwink unwary Nigerians.
In addition, the project is expected to reduce the cost of movement of goods and commuters. That will not happen in any significant manner. The federal government operates no fleet of commercial vehicles. Only a very few state governments are into that line of business, and many of them who are not into partnership with the private sector are loss leaders. No sane private commercial bus operator would go and join the expected long queues in NNPC stations to buy petrol. And there are reasons why they would not. One, NNPC retail outlets would be turned into illegal toll plazas and bastions for corrupt practices. Two, time is of essence to a commercial vehicle operator, so he would willingly pay a bribe to gain access for quick service. The bribe has a potential to defeat the purpose. Three, some retail outlets are currently selling a litre of petrol below what’s on offer by the government. And buyers would not have to contend with long queues, and bribe-giving. So, what’s the attraction? None for any serious business person.
If Tinubu is serious and wants to stop whipping Nigerians with the scorpion as in the story of the Biblical King Rehoboam in the books of the Kings, he should climb down from his high horse, roll up his sleeves and tinker with options to make the price of fuel, which is at the heart of the Nigerian economy, to be affordable. The hackneyed almost four years of insistence by this paloably wicked regime that there were no other options has been defeated by its own half-hearted return of subsidy which it christened discount. Nigerians deserve respite from the punishing regime of unaffordable and crushing prices of petroleum products, election or no election. The tragedy is that the conscience of our ruler is seared.
Century Herald
