By Adisa Adeleye

Perhaps the Federal Government has been very lucky to have taken many Nigerians, especially the commentators on current affairs on a jolly ride either by share deceit or clever maneuvers.

It looks as if attention has been averted from an attempt to raise revenue from increase in gasoline pump price to futile exercise on subsidy removal. Emphasis has now been placed on how to tackle the oil `Cabals` who were accused of milking the country of its oil dividends.

Even before the present mention of Cabals in the oil industry, there had existed what was known as oil `Cartels` in the downstream sector.  Some Nigerians as from the 1960s and 70s had tried successfully to smuggle oil products – gasoline and diesoline – to many West African Countries especially, our neighbors.

The `Cartels` were made up of unscrupulous petrol dealers, mainly in the extreme northern parts of Nigeria and in the southern parts bordering the French territories.  Then, it was a royal battle between the oil marketing companies and their dealers who would divert products meant for their retail outlets to the neighboring French colonies e.g. Niger in the North and Benin and Togo in the Southern part.

The oil `Cartels` of those days were appointed dealers of oil marketing companies (who were also truck owners) and some private tanker suppliers.  Their nefarious trade was smuggling, but not on a very large scale.  The hey-day of the `Cartels` was in 1970s when uniform price of petroleum products became operational.

The NNPC depots in the far North became the supply point to `independent marketers` who had no significant number of retail outlets but were given through-puts from the depots.

The `Cartels` of those days were the big business groups who were aided by depot officials (NNPC and Oil Marketers), petrol dealers and oil tanker owners.  These `Cartels` had friends among the high custom officials watching over our borders.  These borders became porous, not because of difficult terrains but because of smoothness or unhindered crossing, presumably at night, of oil tankers or bulk Lorries into neighboring territories.

However, the smuggling of oil products to neighboring territories became more hazardous because of the vigilance of the oil companies and strong actions taken by them against their unscrupulous dealers. The anti smuggling activities of the government agencies added to the risk, and made smuggling to become less profitable.

It could be assumed that the transformation of the `Cartels` of those days into the `Cabals` of the present time was aided by dilapidated economic infrastructures of the country.  The four refineries became inefficient.  The NNPC depots in many parts of the country were not adequately supplied with products from the refineries, while rail and water transportation of petroleum products totally collapsed.

The remaining road transportation became unreliable and risky because of pot holes arising from poor maintenance.  All these factors including the era of damaged of pipelines combined to affect adequate supply of products to the domestic market.

As the domestic demand for gasoline started to increase, and the domestic supply became inadequate, the need to import became inevitable.  That situation about three years ago gave rise to the appearance of the oil `Cabals` who saw importation as an avenue to make fortunes without pursuing the risky business of smuggling.

The last successful general strike and mass protests definitely put the Federal Government on the defensive.  The reference to `Cabals` as saboteurs looked like a device to cover a lack of positive policy by the government on the downstream sector.

According to the local oil established marketers (some are affiliated to international oil companies), the real `Cabals` might be importers who have no retail outlets but only through-put arrangements.

The mismanagement of subsidy policy could be traced to the doorstep of those who made the refineries inefficient and those who gave import licenses to agencies not connected with oil businesses.

Also, the contract for importation of a single product, e.g. gasoline at a world market price seemed suspicious and unreasonable to a country which is a significant crude oil producer.  Since a barrel of crude oil could be refined to produce gasoline and other products, the import of only gasoline could be described as economic sabotage and aiding the `Cabals`.

Since it is agreed that subsidy is the difference between the landing cost and the local pump price, the present gasoline price of N97 per litre as against import price of N141 per litre, there is still the hidden subsidy of N44.  The present position has put the government in a dilemma if the country`s daily consumption is 40 million litres and the subsidy on each litre is N44, the cost of daily subsidy is N44 x 40 million litres.  What a colossal sum in view of government declaration of using the gains of subsidy removal to effect infrastructural repairs.

If the nation is to be saved from another shortage of supply of gasoline which might eventually lead to the usual long queues at the petrol stations, the government should embark on the rational policy of complete deregulation.  In the meantime, the NNPC should plan to refine the 445.000 barrels per day of crude oil at home and through other nearby refineries.

It should immediately stop the terrible system of refining about 10% of the daily allocations at home and selling the remaining part in exchange for refined products (if that is its operation at the moment).   The current practice of the NNPC in sharing out of the subsidy funds (being an importer of gasoline) looks like economic sabotage and not true patriotic vision of a government agency saddled with adequate provision of domestic supply.

In my view, the real oil `Cabals` are those who have sabotaged the working to full capacity of the four refineries; those who have pocketed the maintenance funds of the four refineries and those who have no business in oil marketing and thus, have diverted the imported products to other countries.