The Gathering Storm

Fri, Mar 29, 2013

By publisher

16 MIN READ

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Organised labour and civil society groups galvanise for mass protests on April 10, in response to President Goodluck Jonathan’s plan to revisit fuel subsidy issue

|  By Olu Ojewale  |  Apr. 8, 2013 @ 01:00 GMT

A GLANCE at the news headlines is enough to tell President Goodluck Jonathan about the unpopularity of his plan to revisit the fuel subsidy issue. On March 19, the President told his audience at the Nigerian Summit in Lagos, that he would remove the remaining subsidy on petroleum products after consultation with the Nigerian people.

According to him, the main beneficiaries of fuel subsidy are the wealthy while majority of Nigerians bear the brunt of lack of infrastructures. “We cannot continue to waste resources meant for a greater number of Nigerians to subsidise the affluent middle class, who are the main beneficiaries,” Jonathan said. While the president was disclosing the planned removal, a high court in Abuja, acting on a case brought before it by Bamidele Aturu, a human rights lawyer, ruled that government has no business in deregulating the downstream oil sector.

In an apparent disregard of the court decision, three days later, Labaran Maku, minister of information, said unequivocally that the government was, indeed, serious about removing the fuel subsidy, so as to conserve funds to develop and execute programmes that would  benefit the Nigerian populace. “Without deregulation, there will be no deregulated downstream sector. Currently, the government is losing; the people are losing, because we cannot generate jobs. The potential that the oil and gas sector could have unleashed on the country is completely truncated. But the effort is continuous, as the government will not relent in its effort to convince Nigerians so as to reverse the trend of Nigerians suffering as a result of the subsidy on fuel,” Maku argued.

But Nigerians are not impressed with the government reasoning and position on the deregulation of the downstream oil sector which will bring about an increase in the prices of petroleum products. Since the announcement, Nigerian labour leaders have been practically up in arms against the government, and a good number of concerned persons have spoken up on the ripple effects that the removal would have on the economy and the suffering of the masses. To demonstrate their seriousness over the matter, the leaderships of the Nigeria Labour Congress, NLC, and the Trade Union Congress, NUT, told the nation on Monday, March 25, that they were going to lead a nation-wide protest on April 10, as a prelude to a bigger one if the government refuses to back down on its plan.

In what may look like a repeat of the nation-wide demonstration that paralysed the country for about six days in January last year, the labour leaders have been telling the president the dire consequence of what the removal of oil subsidy may cause. Declan Ihekaire, national chairman, Concerned Human Rights of Nigeria, told Realnews on phone that President Jonathan would be playing with fire if he should go ahead with the plan. Ihekaire said it was unfortunate that the President would still be talking about the removal of subsidy on petrol despite what happened last year and the agreement he reached with the labour leaders.

“I think it was made clear to the administration last time that if the government did not put in place measures that would alleviate the suffering of the Nigerian people, it should not think about removal of subsidy,” he said. Ihekaire warned that the removal of oil subsidy would bring about conflagration on the already beleaguered country, “and nobody will be spared including the president and members of his cabinet will be burnt.” The activist said that it would be most unfortunate for the president who is faced with security concerns created by the Boko Haram insurgence, to allow the country to burn.

Ihekaire said: “It appears Mr. President is not feeling the pulse of the masses. If he goes ahead to remove it, the fire that it is going to cause, he will not have enough fire extinguishers to deal with it.” The activist said the fallout of the last demonstration had shown that some government officials were only using the subsidy to loot the nation of its oil revenue. He wondered why it was possible for a small country like Niger to build a refinery in six months, and Nigeria could not build or even maintain the ones it has.

A similar warning came from Joe Ajaero, deputy president of the NLC.  He said in view of the situation in the country, the President should be better advised not to stoke people’s anger. “This country is on the verge of a mass revolt where people are waiting for the slightest opportunity to vent their frustration and anger on the political class,” Ajaero warned. He said labour’s position before and after the January 2012 protests had not changed and that the socio-economic situations in the country since the protests, instead of improving, had only worsened.

Therefore, he said, the union remained, “Opposed to deregulation of the downstream sector of the economy… The infrastructure is further decaying by the day, the security situation has worsened, the road networks have remained in a state of disrepair, the power situation has not improved and with all these, including high rate of unemployment and job insecurity, the president is still threatening us with another fuel hike… The president should not dare Nigerians with another fuel hike because Nigerian workers will not accept it and we will fight against it even with the last drop of our blood,” Ajaero warned further. He said the union was further energised by the Tuesday, March 19, ruling of a federal high court in Abuja, that the federal government’s deregulation of the downstream sector of oil industry was illegal and unconstitutional.

Yinka Odumakin, national publicity secretary of Afenifere, a pan-Yoruba socio-cultural group, said in a newspaper interview that Jonathan would be playing with a serious fire if it should go ahead and increase fuel pump price. “He is treading on a dangerous ground and if he has a sense of an adequate interpretation of the situation, that is not an issue to toy with at all. People are now suffering with the level of poverty in the country which has been deepened by laxity in government… To now ask the people to pay more for fuel this time is playing with fire and he should shelve the idea.”

The Nigerian Bar Association, NBA, the umbrella body of legal practitioners across the country, is equally uncomfortable with Jonathan’s plan on deregulation. Speaking on behalf of the association, Okey Wali, the national chairman, warned that taking such action at this point in time would be ill-advised because government had not provided the necessary palliatives it promised Nigerians since the last protests which grounded the country early last year.

Wali thus admonished the president to focus his attention on the provision of basic infrastructures and help alleviate the suffering of the masses instead of compounding their problems through fuel hike. “You will remember that the action that various groups took against that same decision last year was a coordinated action, we believe that the government must, first of all, do what it had promised to do. It is not enough to say that subsidy must go, all those promises must be fulfilled first, among them was the enhancement of the transportation system in the country,” he said.

“The NBA believes that since we have not seen the infrastructure that was promised, it will be ill-advised for the government to proceed on that track without putting infrastructure in place. We advise that it will be a bit shameful in this 2013 for us to go back and start demanding for what we think was already agreed upon since 2012,” he added.

Junaid Mohammed, national coordinator of the Coalition of Northern Politicians, Academics, Professionals and Businessmen, said the president’s plan was a declaration of war on Nigerians.  He said the Labour movement must explain to Nigerians why they believed in President Jonathan last year. “For me, I think it is time for Nigerians to stand up and fight for their rights,” Mohammed said.

Holding a similar position is Tam David-West, professor of virology and former minister of petroleum resources. In an interview with Realnews, David-West said that the whole issue about subsidy was nothing but a fraud, a system designed by some government officials to steal government funds. “Any increase in pump price is irresponsible. It is a fraud; it is a lie. The president is not telling the truth. It is all part of corruption in the government. I am ashamed of what President Jonathan has done. You cannot remove what is not there. All the probes have shown that fuel subsidy is an avenue for government officials to defraud this country. During the probes, they gave 10 different figures on how much they had spent on subsidy. It is shameful.”

According to the professor, the people in government are the importers of petroleum products and because of their business interests they want to continue to exploit Nigerians. He said he had challenged every government since the Ibrahim Babangida regime to a public debate where he would show Nigeria how Nigerian leaders have allowed an oil cabal to feed fat on the nation’s wealth. “The responsibility of every government is to take care of the welfare of the people. You can’t do that when you allow people to suffer. You don’t do that by imposing a high price of fuel on them. The maximum price of fuel in this country should not be more than N40. They tell you that the landing price is N140, it is a lie. I have challenged everyone of them in government to a public debate for him to show the hypocrisy of government action. The government’s responsibility is to ensure that citizens are well taken care of. But that is not the case here. They are paying themselves millions of Naira to deprive Nigerians of their God-given wealth,” David-West said.

On his part, Aturu said he expected Jonathan to respect the law and desist from the deregulation of the downstream oil sector which will give rise to high pump price of petroleum.  “By the time he was making that statement, I am sure he had not known that there was a judgment in court but I am sure the president will uphold the law of the land … I am sure the Presidency will withdraw that plan and will not allow it to go on since the president respects the rule of law,” Aturu said, adding that if the president ignored the judgement, “Nigerians will certainly challenge this total fuel subsidy removal,” he said.

But Tunji Abayomi, human rights lawyer, wants the issue of fuel subsidy to be handled carefully. He said the issue of oil subsidy was complicated for people to have the full understanding. “Look at the revelation we had; it has created financial oligarchy at the expense of the Nigerian masses. That is not in the interest of Nigerians,” Abayomi told Realnews. He said further, “When you don’t have fuel, the elites will get fuel to buy. If you allow the subsidy and the masses don’t have fuel, the elites will get fuel, and the other elites, the oligarchy, will also get fuel to buy because they have the money, that is not good enough for the public. But if you remove the subsidy and the masses have fuel, fine, but they may not get it at affordable price. That is not good either.”

He said what the nation needs now is for the government to show more commitment to the welfare of the masses. “I think what is needed here is for the government to convince the masses that all organs of government are responsible, including the oil sector with our refineries working, then you can be sure that nobody will care about the removal of fuel subsidy. Government must show that it can be trusted,” Abayomi said.

Indeed, Nigerians are not convinced that whenever government tampers with the prices of petroleum products it does so for public good. But rather that it does so each time the regime finds itself in an economically tight corner. The public is not convinced that government has enough political will to deal with the so-called oil cabal that often dictates prices of petroleum products at will. Nigerians also need to be convinced that the government is working in their interest. According to analysts, government must recover the N3 billion stolen by some oil marketers, which was discovered during the probes that followed last year’s protests. Some of them are still in court.

Critics of government’s position on fuel subsidy say it appears government wants to shield some marketers and also punish some. This, according to them, shows that government is using the cabal as a cover to remove the fuel subsidy, which the masses believe is the only benefit they get from the nation’s oil. The argument is also that since there is no form of social security scheme for the citizens, fuel should be made affordable to the masses. Besides, more than 70 per cent of Nigerians are believed to be living below the poverty line of less than $1 dollar per day, while there is massive unemployment in the country.

Nigerians are equally unhappy that almost all the nation’s refineries are not working at optimum capacity. In October last year, Diezani Alison-Madueke, petroleum minister, told the Senate Committee on Downstream Sector, that government had earmarked N251.2billion for the repair of three refineries. The amount may well have gone down the drain because the refineries are still not operating optimally. As if that is not bad enough, plans to build new refineries seem to have been frustrated by the bureaucracy. Nowhere is the government’s lack of seriousness demonstrated than in its much-hyped plan to build three Greenfield refineries. Recently media reports indicate that the sites allotted for them were overgrown with weeds.

This makes the nation depend on fuel importation for its domestic use. According to the Petroleum Product Pricing Regulatory Agency, PPPRA, the landing cost of a litre of petrol is currently N131.10, with total delivery distribution margins of N15.49, thereby bringing the total cost to N146.59. The agency, therefore said if the subsidy was eventually removed, Nigerians would pay not less than N146.59 per litre of petrol.

But David-West has dismissed the PPRA computation insisting that the price of fuel should not be more than N40 in the country. He claimed that during the Mohammdu Buhari era, when he served as petroleum minister, with three refineries, Nigeria was able to take care of its fuel requirement and that whenever there was a short fall, the government gave crude oil to some big oil companies to refine abroad, and after they might have refined it, they would supply the needed quantity to meet the requirement, and sell the remaining and then give the money to the government in foreign exchange.

“We never imported fuel,” he said. But since the cabal has taken over the market, with active connivance of Nigerian leaders, he said, it was sad to say Nigeria now imports fuel. According to the professor, there is no importation of fuel, but there is a clever design method by which the cabal takes refined products from Nigeria’s refineries and claim to have imported same. He said the cabal would not want the refineries to work because it pays them better to import and sell to Nigeria at the existing exchange rate.

Whatever the true position, now that government wants to engage Nigerians in a dialogue over the planned fuel subsidy removal, it may be difficult to win the people and organisations to its side, bearing in mind the unfulfilled promises it made after the last protests on the same issue. After the weeklong protests last year, government partially succumbed to public pressure not to remove the subsidy entirely because of the suffering in the land. After much haggling, it partially removed the subsidy and reduced petrol price from N141 to N97 per litre.

To appease the masses, the Jonathan administration announced some palliatives to cushion the negative impacts of the subsidy removal. These included the procurement and distribution of about 1000 mass transit buses to the 36 states and the Federal Capital Territory, FCT, Abuja, as well as the establishment of the Subsidy Reinvestment and Empowerment Programme, SURE-P, under the leadership of Christopher Kolade, former Nigerian High Commissioner to Britain.

According to Kolade, when the Sure-P was inaugurated in February, last year, it did not get the first release of funds to start its work until July. So, in the last six months of the year, the committee spent more than N70 billion on various youth development programmes, creation of jobs and building of roads. “If we had N180 billion for the whole year and we spent N70 billion plus in six months, it means that we worked at the rate we were supposed to work. You know that the beginning of something new is bound to take off slowly. It cannot suddenly start running. It was a normal start and it was accelerating as we went through the year,” he said.

But critics say the palliatives provided so far, were a mere drop in the ocean because of the various challenges confronting the masses, especially in the area of infrastructure.  In a few states where the buses had ceremoniously been deployed, commuters have not felt their impact. Besides, there are allegations that the SURE-P scheme has been seriously compromised by influential politicians eyeing the 2015 elections.

According to critics, the promise of massive job creation and other goodies has remained a mere promise, just as the government is again touting the idea of removing the remaining subsidy. This, they argued, would further compound the problems of the masses and further enrich the oil sheiks in the land. After reaching the agreement which led the labour leaders to suspend its protests, Abdulwaheed Omar, president of the NLC, said that the workers had succeeded in sending a warning to the authorities about the readiness of Nigerians to rise up against any unpopular government policy henceforth. “We are sure that no government or institution will take Nigerians for granted again,” he said. But it appears that President Jonathan is not on the same wavelength with the labour leader. Will the president dare the consequence and go ahead with the subsidy removal plan? For now, it is a matter of conjecture.