By Akoma Chinweoke
Chief Martin Onovo, a petroleum engineer and national leader of the Strategic Union of Professionals for the Advancement of Nigeria, SUPA, argues, in this interview, that planned deregulation of the downstream sector of the oil industry would cause more hardship to Nigerians.

The plan by the Federal Government to remove subsidy on petroleum products has remained a subject of controversy. How do you react to that?

Well, first is that SUPA has always championed the resistance to deregulation and, in reality, there is no subsidy on domestic supply. You can’t produce a product for N25, sell it for N65 and claim that you are subsidizing that product. That is the first fallacy.

The challenge the government has is improving domestic production. Instead of doing that, just the same way it has failed in other sectors, the government has abandoned domestic production and completely depends on importation.

That’s why they claim there is subsidy because importing is expensive. Crude oil is produced in this country, we have refineries, so why are we importing? That is the question the government needs to answer instead of misleading people that it is subsidizing any product.

The second fact is that immediately deregulation is done, the price would almost double and increase continuously just like we have witnessed in the past. While Gowon was in power, it was about eight kobo per litre and when Obasanjo did the first removal of subsidy, the price increased. So, continuously, at each stage, whenever we claim to remove subsidy, what we do is to cause inflation in our economy and that is macro economic instability.

This causes serious unemployment, industrial crisis, inflation and devaluation of the naira. We have done several full page position paper against deregulation in newspapers and on TV. What we are saying is that once the price of fuel doubles, correspondingly hyper inflation takes over.

So, since that is known, it is obvious that the government is the one that is deliberately trying to destroy the economy. It is difficult to believe but that is what is happening because deregulation does not make sense as it ranks with SAP. It is the same silly concept.

Economic capacity is measured by gross domestic product, GDP, not by gross imported product. Why does the same government have an import prohibition list? It is to protect the local economy. Why is the same government who wants to protect its economy trying to subvert its mainstay. Refineries have been in the country for several decades . Why are they run down?

At the current N65 per litre, we have the highest price in the whole of OPEC yet we have the lowest standard of living. That is a contradiction, highest price for basic energy, lowest standard of living. In Venezuela, a litre is 12 cents per gallon, when you do the arithmetic conversion, it becomes N4.50k per litre.

Venezuela is a member of OPEC like Nigeria, how do you reconcile that? In the same country, medical care is free based on oil money.

Of all the oil rich countries, Nigeria has the lowest standard of living because we continuously do the wrong thing and corruptly justify them. The industrial crisis this is going to cause in many organizations might lead to continuous demand for increase in wages and when that happens, employers may not be able to pay.

How is that going to impact on the government itself and the economy?
Government itself is going to be so terribly affected because it spends on its projects and operations. So, the cost of running government will triple with time.

The Obasanjo-led government came in at N20 per litre, by the time he left it was N65 per litre which is more than three times the price it was when he came in and he was not satisfied as he moved it to N70 before he left. What does that tell you? Deregulation is a bottomless pit. We went from 8k to 15k, it wasn’t sufficient.

We went all the way to N3 .25k, N5 and we are at N65 yet it is not sufficient. We would get to N7,000 per litre and it would not be sufficient because all we are doing is just causing inflation in the economy.
The government is talking about private sector-driven economy. How would you measure the efforts to develop critical infrastructure to support work scope in the country?

A private sector-led economy does not amount to a dysfunctional economy. What we should think about is private sector productivity domestically, otherwise whatever we are doing will not grow the economy. Don’t forget that the refineries where you import the refined products from, nationals of that country work in those refineries.

So, you are creating employment in other people’s country thereby hindering employment in your country because your own refineries do not work. So, because our refineries are down, our graduates in chemical or petroleum engineering would need to travel abroad to get jobs . A lot of these things we go about conferencing require no theories.

All it requires is common sense but corruption inhibits common sense and the corrupt cannot fight it. So, when you are talking about private sector-led economy, it is copy cat from the US and the west. France is basically a socialist economy because the state provides welfare for its citizens.

The corrupt rulership in Nigeria did not learn that. In the UK, health is completely public, our leaders did not learn from that. Now they said in the US, the downstream sector is deregulated but they did not tell you that mineral wealth is privately held in the US.

We take whatever suits our corrupt objective from one country and justify that it does that. Mineral wealth in Nigeria is publicly held as if your father’s farm has oil, government would pay you compensation and take the oil. They would pay you compensation for your surface asset because, by law, mineral rights are completely controlled by the Federal Government wherever they are found and that’s why you hear about resource control.