Editorial

January 3, 2012

Challenging Subsidy Solutions

SUBSIDY on petroleum products will define 2012. It does not matter if it is removed today or tomorrow. Or even if it is not removed. Fears persist that government has found a niche in its pendulous position on subsidy.

Each government official in lending support to this cardinal project of government adds another contradictory dimension to the debate. Government has not articulated how it intends to implement subsidy removal. With the subsidy still seen as a phantom, government’s position is simple – subsidy must go.

Ministers are using the holidays to enlighten their people on the benefits of subsidy removal. Their positions are as varied as their understanding of the subject. The umbrella position of government is that petrol has to sell at a new high price or the country would collapse.

Government does not know what it would make from a new price for petrol. It has no plan to save it. All the talks about projects from the savings are re-packaging of the same projects government never attempted to commence. What is more baffling is that government is confused about implementing the supposed projects. A proposed bureaucracy to decide on these matters is a hint that government is proceeding with another unclear project.
Unlike the construction of a bridge or a road, which it can conveniently abandon, price of petrol is an inflaming issue that should be treated with uttermost consideration for the common good. Government thinks only of its own good.

Nigerians have an unequivocal position on this issue: there is no subsidy, we are paying for government approved inefficiencies, corruption and incompetence. They are also raising questions that befuddle government.

Why is government unconcerned about corruption that inflates the price of petroleum products? Why is government protecting the perpetrators of the corruption? Has anyone ever been punished for the inconclusive turn-around maintenance of the refineries? Why are details of the maintenance of the refineries among the nation’s best-kept secrets?
Who will be the losers if the local refineries work? In whose interest is government acting? Some answers would unveil the corruption that is responsible for government’s insatiable request for higher prices for petroleum products. There will be no end to the debate.

A group called Coalition to Save Nigeria said in Benin City that actual cost of fuel should be N39.50 per litre. Can government respond to that position? The contentions are not only from the private sector.

Director-General of the Nigerian Maritime Administration and Safety Agency, NIMASA, Patrick Akpobolokemi, in an interview, gave another angle to the debate. He aligned with the position on corruption, but gave more details.

According to him, “We so much talk about subsidy removal in Nigeria. People carry product from Nigeria precisely from Port Harcourt for instance, maybe the point of destination is also Port Harcourt. Some of these ships are found in Lagos discharging into another ship from where it is moved outside Nigerian waters and then brought back into the country as import.

“It is then recorded that they have supplied petroleum product, asking for subsidy. You should not be arguing with the President on the removal of the subsidy, it is because this illegality is so much. When it is removed, let us see how somebody can parade various ports asking for subsidy,” Akpobolokemi said.

We do not doubt Akpobolokemi. We just wonder what government is doing about this. We are also worried that in asking Nigerians to pay more for petrol, there are no guarantees that other sharp practices would not make the product scare.

Government should fight corruption in this sector, improve electricity supply, and have the local refineries work. All these would lessen the burden government bears. It is unacceptable for government to punish everyone, when it knows those committing crimes that are destroying the country. The issue at hand is not subsidy.

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