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Deregulation – Pains To Gains

OUR governments have notoriety for failing in their promises. This character is solely responsible for the vicious attacks on the planned deregulation of the oil industry. There is even the sinister conclusion that what government is aiming at is not deregulation, but price increase.

The protests have begun. They have become the traditional labour and civil society manner of telling governments that they disagree with the acclaimed benefits of deregulation. This time the protests would be stronger, probably without eliciting any reactions from an irresponsive government.

We have been at them for more than 20 years. Lives have been lost, trillions of Naira has gone into government coffers without the promised improvements in electricity, transportation, education, health services.

Government owes the citizenry a constitutional responsibility of providing infrastructure for the growth and development of society. Whichever road government travels to arrive at this destination must be one that gives the people minimal pain and inconvenience.

Government does not see the importance of a relationship with the people that is built on understanding that the essence of government is security and welfare of the people, as stated in Section 14 (2) b of the 1999 Constitution.

Arguments on deregulation of petroleum prices would always remain emotional. The same bait of better infrastructure that has not been achieved in the past two decades of debates on petroleum products are still in vogue. Debates have lasted because government has not been truthful. While General Ibrahim Babangida, Chief Olusegun Obasanjo and President Umaru Musa Yar’Adua have expended huge resources wooing leadership of labour and civil society groups, the public worries are unattended.

Government’s expenditure of N1.802.4 trillion on subsidy in the last four years is scandalous. The figure is more than four times its expenditure on capital projects in four years.  The breakdown is N255.7 billion in 2006, N290 billion in 2007 and N654.7 billion in 2008 and about N602 billion so far this year.

Allegations of corruption in the oil sector receive poor responses from government. Accountability is poor and even another federal agency, the Revenue Mobilisation Allocation Fiscal Commission, RMAFC, accuses the Nigerian National Petroleum Corporation, NNPC, of not remitting revenue due to the government.

Labour wants subsidy retained, arguing there were avoidable wastes in the system from demurrage and corruption. Subsidy is the platform on which large scale corruption thrives.

Diesel has been deregulated in the past three years. Most of the big commuter buses run on diesel. Regulated price of petrol at N65 per litre holds in Lagos, Abuja, parts of Port Harcourt and a few other places. The rest of the country buys petrol at deregulated prices.

The new protests should centre on ensuring deregulation which would enthrone competitiveness and better services (not just price increases). Government’s talk of using money that would be saved in improving infrastructure provided no details of  intention.

Labour and civil society organisations should devise better   ways of holding government accountable for how it uses the saving from deregulation.


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