DANCING ROUND THE FUEL PRICE HIKE
DANCING ROUND THE FUEL PRICE HIKE
By Adeola Soetan
As the sixth largest producer of crude oil in the world, the steady rise of price of crude oil in international market is expected to be an economic blessing in oil revenue, human capital and infrastructural development but the paradox is a bout of economic misery occasioned by higher prices for petrol, diesel, kerosene and other products from crude oil consumed domestically.
For over two decades now, from Babangida to Obasanjo, government’s response to energy crisis either local or international, has been to increase fuel price with the untenable excuse that price of fuel is heavily subsidized and the need for its removal and allow market forces of demand and supply, alias, liberalization and deregulation to determine the prices of local consumption relative to global price, with the promise to make use of the removed subsidy for social development. A vicious circle of ill-fated anti-poor policies with crushing effect on the people.
The fuel crisis reached a crescendo with Obasanjo’s regime when all the four nation’s refineries collapsed despite over N450billion spent on Turn Around Maintenance (TAM). The country, since then, has been depending solely on refined fuel importation while exporting an average of 2.5 million barrels of crude oil per day.
With a barrel going for over $100, Nigeria is supposed to be in opulence with the citizens living in affluence. The reverse is the case because of privatization which has left oil business in the hands of profit merchants who conspired against the functioning of the refineries. With this present scenario, Yar’Adua’s government is only bidding time before another regime of fuel price hike is imposed on Nigerians except there is a coordinated resistance, which should be pre-emptive and pro-active in character.
Unless the four local refineries are working at optimal installed capacities and many more built by government, the regular increment in local pump price would be inevitable. But will the refineries work and many built to stop importation? Under the prevailing condition of “get rich quick” at no pain in the oil sector, where licenses to oil blocks and oil importation are given as patronages to political acolytes and financiers of political office holders, it would be a wild dream to expect refineries to work. If they work, it means importation stops and easy profits stop. This is unthinkable. Even President Yar’Adua acknowledged this difficulty when he declared last year before stakeholders in America that “one of the areas we are going to clean now is the national oil company” adding that the oil sector “has not been transparent in its operations”.
Alluding to the institutionalized corruption at the Nigerian National Petroleum Company (NNPC), Yar’Adua blamed what he called “vested interest of very powerful people in the country” for the persistent fuel crisis. But his predecessors, particularly, General Olusegun Obasanjo have made more proclamations than his, they all left the oil sector worse and more corruption ridden than they met the situation with billions of tax payers money down the drain.
It would be recalled that the Federal Government under Obasanjo as part of its economic reform measures to deregulate the downstream sector of the petroleum industry gave licenses to 18 private companies in 2004 to build and operate refineries. The estimated installed capacities of these refineries were put at 1,399,000 barrels per day. Beyond the fun fare of signing of documents and newspapers razzmatazz, none of the license is operational.
Labour leadership should appreciate the ideological war being unleashed on the working masses through the neo-liberal policies of deregulation, liberalization and cut in government spending and subsidy removal. Rather than continue to waste time and energy in fruitless consultation with government on what the pump price should be, NLC, TUC, LASCO and other pro-masses platforms should commence campaign to mobilize the ranks and file to resist the imminent increment in prices of petroleum products.
Until we pose a clear-cut ideological and economical alternatives to the rotten capitalist mismanagement of the economy, the leadership of labour will continue to be conscious accomplice to the ruling elites’ crime against Nigerians.
Until the commanding heights of the nation’s economy including the petroleum sector are nationalized under the democratic management and control of the working class, farmers, students, and other toiling poor through their elected representatives and formation of a genuine working peoples party that can wrest power from the present thieving elite, no amount of economic dose will make Nigeria a better place to live for the poor masses.