Democratic Socialist Movement

For Struggle, Solidarity and Socialism in Nigeria

By - DSM



Press statement, June 27, 2011

Scarcity of kerosene, cooking gas used mostly by the masses is currently biting harder, the poor groaning while the big businesses in the petroleum industry are making brisk business. Though, kerosene had hardly sold for the N50 the official price, it had skyrocketed in the past weeks. It currently sells for about N80 a liter depending on the state and area. At a period it had even sold for about N300 a litre. This has had a multiplier effect on other household products like food stuff and steadily increased the cost of living.

The government and Nigeria National Petroleum Corporation (NNPC) officials have blamed the middle men and marketers for the scarcity while the marketers are blaming the NNPC for not importing adequate products.

There is no way petroleum products will be available at affordable price when anti-poor policies as deregulation, privatization, commercialization and cuts in public investment are implemented with the sole aim to guarantee profit for a few and not to meet the needs of the people. It is the criminal collaboration between top government officials and privileged big private dealers which has subjected ordinary people to endless suffering.

The government and its lackeys making huge profit at the expense of the poor have claimed that it is the deregulation and the removal “subsidy” on all petroleum products is the solution to scarcity of the products. Diesel has been deregulated and yet prices have kept going up to the extent that it sells for at about N150. Those who argue for deregulation such that private operators will solely determine production and distribution of petroleum products and allow market forces to determine the prices do that not because deregulation will make the products available at an affordable price, but because they want to continue the massive exploitation of the Nigerian people and make brisk money.

The only way petroleum products can be available at an affordable price for all is when enough petroleum products are refined publicly to go round in Nigeria and not by granting more licenses to as many petroleum importers to keep importing the products, an action that will subject the prices to the fluctuating international market prices. And to prove that deregulation vis-Å•-vis market forces and profit will deepen the crisis, none of the 18 private investors licensed between 2002 and 2003, by the then Obasanjo-led government to build refineries is capable of building a refinery. For these so called private investors, the primary motivation is to make quick profit and the only way to achieve this is to continue importation.

Besides, the Obasanjo-led government spent a whopping sum of $700 million (N108 Billion) for turnaround maintenance of the 4 refineries with no visible improvement, yet nobody is being investigated by the EFCC, ICPC or the police! Whereas, according to some experts, N3 billion will build a 20,000 bpd capacity refinery while a 100,000 bpd capacity refinery could cost N75 billion. The ready-made explanation is that government does not have money. There would never be money because it has to be daily looted or willfully handed to the so called private investors. For example, a staggering N339 billion is to be shared amongst 469 legislators in 4 years, this is just what we know. We are yet to know the jumbo allowances earned by the incoming officials of the Presidency, different ministries, State House of Assemblies, Governors offices, commissioners and all the assistants. From those reported to have looted alone: Joshua Dariye our brand new “Labour” Party Senator was found in 2004, while he was the governor of Plateau, with 920,000 pounds sterling in his Barclays Bank account and 43,000 pounds cash in his hotel room in London. Hassan Lawal, a former minister of works is being investigated for N75billion scam. Some top officials in the immediate past Oyo state administration of Aalo-Akala are being investigated for N6billion fraud and corrupt activities are just endless.

The corruption and fraud in NNPC and the petroleum industry is monumental! So, we have more money to build more refineries, repair the existing refineries, lay pipes, build storage facilities and all other facilities if only the energy sector is planned in a manner to make the petroleum products available at an affordable price to all. It will afford the country the opportunity to also make more money from export of refined petroleum products to other countries, particularly in West Africa countries.

Nigeria is the sixth largest producer of oil in the world, yet she could not refine its crude oil for local consumption while some OPEC countries are even exporting refined petroleum products to earn additional revenue. Venezuela has 15 refineries, Iran has nine refineries and refines about 1 million bpd, Indonesia has about 10 refineries and refines over 1 million bpd, South Africa, a Non-OPEC member and not a major oil producer has 4 functional refineries; Egypt also a Non-OPEC country has eight refineries. This makes the cost of procuring these petroleum products in countries that have functional refineries to be relatively cheap since the price is not necessarily subjected to fluctuation in the international market.

What is more worrisome is the silence and neutrality of the trade union movement when the prices kerosene, diesel and cooking gas are hiked. It is a wrong tactics for the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) to fight only the increment of petrol prices while other petroleum products are brazenly hiked. This piecemeal tactics has emboldened the ruling elite to start the process of completing the deregulation of the downstream petroleum industry wherein price of petrol will be hiked in line with market forces going by the demand of the Governors’ Forum that calls on President Jonathan to remove fuel subsidy. Already, President Jonathan had set up special committee comprising of major marketers and other stakeholders in the economy to fully deregulate the petroleum industry by August 2011.

The Democratic Socialist Movement (DSM) calls on the NLC and the TUC to lead a struggle against hikes in the prices of kerosene, diesels etc. The trade union movement must understand that the battle to save the working people from the clutches of slavery and exploitation cannot be fought piecemeal and haphazardly. It is time to lead a working people political movement that will take the whole economy as one- be it education, health, energy, transportation etc. This political movement must be able to pose a socialist alternative to neo-liberal policies of privatization, deregulation, concessioning and that alternative should be a planned publicly driven and workers democratically controlled massive investment in all facets of the economy with the aim to meet the needs of all. The entire petroleum industry including exploration multinationals should be nationalised and placed under workers’ democratic control and management in order to forestall sharp corrupt practices and afford us the opportunity to have funds to provide the needed infrastructure and facilities. Anything short of this is to give the ruling elite the opportunity to continue attacks on the living condition of the working masses.