OIL SUBSIDY REMOVAL/FUEL PRICE HIKE: FAST LANE TO SOCIO-POLITICAL CATASTROPHIES

Segun Sango, General Secretary, DSM

Come January 2012, the Jonathan government has announced that its decision to remove the so-called subsidy on fuel prices will be implemented. Going by past experience and especially within the atmosphere of virtual socio-political and economic paralysis which presently dominates the country, the implementation of this well-worn but counter-productive, pro-rich, anti-growth/anti-poor measure would only provoke deeper catastrophic consequences for the country’s working, but eternally poor, people and Nigeria itself as a corporate entity.

According to President Jonathan and his economic advisers and backers, the government has been spending far too much money on subsidizing the actual prices of fuel products and that unless this is immediately stopped, the prevailing multi-faceted socio-economic problems ravaging Nigeria will only get worse. Specifically, the PPRA has come forward to claim that a whopping sum of N3.7 trillion was spent on fuel subsidy between year 2006 and now. Consequently, government spokespersons and their imperialist backers are now arguing that once the fuel subsidy is ended, this kind of whopping sum can be channelled to other crucial needs of the economy and society. Will government’s prognosis work out in this respect? Going by past brutal experiences, it can be safely concluded that this ferocious, pro-rich, anti-poor and anti-growth economic recipe, will only worsen the overall state of the economy and the living standard of the vast majority of Nigerians.

For Nigeria, the petroleum sector constitutes the most singular important economic propellant. It fetches government about 80% of its total revenues.

From bitter past experiences, once the prices of fuel are hiked, the cost of transportation, education, housing and general services will go up. Presently, due to lack of stable publicly generated electricity, the cost of goods and services in Nigeria remain very highly prohibitive to such an extent that many companies have been forced to relocate to neighbouring West African countries and overseas where the costs of running businesses are comparatively cheaper, leading to mass retrenchment of millions of workers and total deprivation of job opportunities in Nigeria itself. This was partly the unpalatable result of previous hikes of fuel prices. Against this background the offer by government to use the money saved through the process of fuel subsidy withdrawal or hike of fuel prices, to enhance the growth of the economy is to say the least very dubious and totally untenable. Going by the private sector/profit-first disposition of the ruling elites in power, any additional incomes that come to the government would end up being looted and shared through awards of bogus but highly inflated contracts that would have little or no bearing on the development of the economy and the living standard of the people.

Few years ago, when Dr. Ngozi Okonjo-Iweala was previously Minister of Finance under former President Olusegun Obasanjo’s government, the Nigerian ruling elites gifted the global financial sharks, led by the Paris Club, a whopping sum of about $18 billion, almost at once, under the slogan of making Nigeria debt free. Their central promise then was based on the deliberate lie that the huge sums of money being paid annually on servicing and repayment of Nigeria’s massive external debt would henceforth be channelled to revive the then prevailing economic paralysis. However, as the DSM and some other public commentators argued at the time, the reckless financial brigandage being promoted as economic wizardry actually plunged Nigeria’s economy and the living standard of its poorest sections into greater distress. According to the Manufacturers Association of Nigeria (MAN), companies that employed more than 50 workers and above lost over 1.9 million jobs between 2002 and 2008 apart from the other millions across all sectors that lost their means of livelihood as a result of this pro-imperialist economic strategy.

Under the prevailing economic difficulties, the implementation of the proposed fuel subsidy withdrawal or fuel price hike would only drive the overall economy and the living standards of ordinary Nigerians into a factual dead end.

HOW TO PROPERLY FIGHT AND PERMANENTLY END THIS VICIOUS CIRCLE

Therefore, the opposition to government’s so called policy of fuel subsidy removal or, bluntly put, fuel price hike by both the NLC and TUC was absolutely correct from the onset and must be fully supported by the entire working masses and the youths who in fact must play direct, leading roles in the struggle to fight and permanently defeat all the ruling class’s anti-poor policies and their governments. However, based on the fact that the NLC and the working masses in general have in the past, gone on several general strikes and mass protests against this particular anti-poor policy, the DSM would therefore like to reiterate the scientific socialist measures and tactics that the working masses need to employ in order to wage a successful struggle against this perennial anti-growth, anti-poor policy.

First and foremost, labour leaders and working class activists must recognize this policy as the central pivot of the capitalist strategy to ensure that the wealth and resources of society become the exclusive property of a few rich millionaires and billionaires. Secondly, this policy must not be seen as an isolated phenomenon but as part of myriad of measures and policies in other areas of the economy all seeking to benefit a few rich millionaires and billionaires at the expense of the vast majority of ordinary citizens. This is why the current Jonathan presidency at federal level has simultaneously raised the proposals to totally deregulate the entire oil sector; a proposal which is presently being prosecuted through the promulgation into a law of the so-called Petroleum Industry Bill, PIB.

It is the same disposition to enrich a few rich at the expense of the majority that is the central driving force behind the plans to sell the public electricity to private capitalist corporations and individuals. It is this same policy that runs through the commercialization and privatization of education and healthcare in the country leading to massive destruction of public investment in these sectors and the proliferation of high fee charging private educational institutions and hospitals only for those that have sufficient money. Roads and waterways development on which the capitalists, in the past used to spend public money on as an inescapable pre-condition for economic development and social well-being, have now been consigned to private profiteers under the guise of Public Private Partnership (PPP), with the disastrous consequences of bad and broken roads in most part of the country and within cities. It is this same profit-first consideration that has made it impossible for Nigeria to use its vast and abundant human and natural resources in such a planned and democratic manner with a view to provide basic decent living for every Nigerian. This is why millions of youths and tens of thousands of graduates of tertiary institutions permanently remain without jobs while 80% of Nigerians live on less than $2 per day.

In mid-November the Statistician-General of the Federation, Yomi Kale, reported that, despite claims of economic growth the National Bureau of Statistics believed that ” ‘The unemployment rate…in the first half of 2011 increased to 23.9 per cent…This represents an increase of 1.8 million additional unemployed people between December 2010 and June 2011.’

“The Bureau attributed the rise in the ranks of the nation’s unemployed to fresh entrants to the job market and worker layoffs across all sectors of the economy in the course of the year.

“Stating that every employed Nigerian was economically responsible for three other citizens, Kale disclosed that Yobe, Zamfara and Niger states stayed atop the ignoble list of states with highest incidence of unemployment.

“Yobe, which recently reeled under terrorist attack, tops the chart with 60.6 per cent of its employable population being unemployed. Zamfara followed with 42.6 per cent of the total employment population, while Niger has 39.7 per cent.

“States in the South-West had the lowest index. Osun came in with the lowest figure of three per cent unemployment; Kwara, 7.1 per cent and Lagos 8.3 per cent.

Stressing that the inflationary trend is “slightly on the rise”, Kale said: ‘The biggest contributors to the rise in consumer inflation in the preceding month were high cost of kerosene and diesel’ Consumer inflation rose to 10.5 per cent year-on-year in October, up from 10.3 per cent in the previous month.” (The Guardian, November 17, 2011)

Against the background of this disastrous, and worsening situation the NLC and the TUC leaders and the majority of the working masses elements must of necessity be able to proffer a complete scientific, economic and political alternative to those being offered by the pro-capitalist politicians and ruling elites and at the same time prepare to wage protracted mass struggles to defeat not only pro-rich anti-poor policies, but as well the capitalist anti-poor governments. This, in the DSM’s opinion, is the most realistic way of permanently ending incessant hike of fuel prices as well as other government anti-poor policies. Unfortunately however, the NLC and the TUC leaders that are currently voicing opposition to this pro-rich, anti-poor policy have not been sufficiently articulating a coherent and specific economic and political policies and strategies through which the capitalist government and all its anti-poor policies can be permanently defeated.

In one of its frequent but most comprehensive statements so far against the proposed policy, the position of the NLC was articulated by its president, Abdulwhaed Omar, recently to the media on October 26, 2011 and reported thus by the Nation newspaper of October 27, 2011:

“The position of the NLC is that our oil resources which should be an advantage to the country, should be used for the benefit of the people; that as Nigerians, we should have comparative advantage on prices of petroleum products over citizens of non-oil producing states.

“The NLC rejects the Petroleum Minister’s lamentation that government cannot check the fraud in subsidy because ‘… we are not in a military regime, the market forces of supply and demand has to be allowed to a certain extent.’

“We think that this is a rationalisation of criminality and an admission of failure. We do not need a military regime, to deal with criminality, what we need is a democratic process of bringing culprits before a court of competent jurisdiction and dispensing justice.

“The minister’s announcement that a Think Tank is being proposed by government on the subsidy issue is laughable as government should have done so and thought through the process before announcing subsidy removal.

“Also, her claims that government wants to consult “stakeholders” on the issue is like putting the cart before the horse; that should have been a basic step before government announcement of its decision to remove oil subsidy.

“Her announcement that the subsidy to be removed would be used for road works, public maintenance, mass transportation, youths skill development, maternity and child care is gimmickry; what are the huge resources of the country, which are at the disposal of government used for?

“The reality is that despite the trillions of naira budgeted annually for these basic needs, the roads remain in a deplorable state, public maintenance is absent, mass transportation is non-existent, youths are abandoned as are the public hospitals leading to high mother and child mortality rates.

“The Petroleum Minister also announced that the proceeds of the subsidy removal will be managed by Nigerians of integrity. The question is, who are those managing the national economy and the annual budgets; if they are not Nigerians of integrity, why not handover the economy to such Nigerians?

“The Minister’s statement that ‘We (Jonathan administration) cannot please all the people all the time’ rings hollow. While this is a truism, the removal of oil subsidy will displease 99 per cent Nigerians. If government disproves this, it should subject its fuel subsidy removal to a referendum,” the NLC President said.

The position of the TUC in this respect was articulated by the Rivers State Chairman of the TUC, Mr. Chika Onuegbu, while recently speaking with The Punch in Port Harcourt stated thus:

“We urge the Federal Government to consider the concerns of various stakeholders as well as come up with how to grow the local refining capacity such that within the next five years, we will meet locally all our domestic demand for refined petroleum products in Nigeria, and such that within the next seven years, we will be exporting refined petroleum products to neighbouring African countries.

“The government should also demonstrate very clearly how the proposed policy of fuel subsidy removal will reduce poverty and unemployment in Nigeria before we can begin to consider whether or not to support it.” He expressed the fear that sharing the funds accruing from the removal of oil subsidy among the three tiers of government could trigger another round of corruption and inefficiency. Onuegbu said, “As for the much talked about cabal in the oil industry, we think that they are not bigger than the government and the country. If the government is determined, they can be brought to book and their activities adequately checked. “We are also hopeful that the Senator Magnus Abe joint committee on fuel subsidy investigation in the operation and management of the oil subsidy in Nigeria will expose the huge corruption and inefficiency that exist in the management of the oil subsidy in Nigeria” (Punch, November 3, 2011).

VICIOUS CIRCLE

As noted before, the NLC in particular has led several industrial general strikes and mass protests against the current anti-poor policy of fuel price hike in the past eleven years. To a certain extent, the TUC has also played roles in the above mentioned struggles. Sadly however, their above quoted positions against government decision to once again hike fuel prices under the guise of “fuel subsidy withdrawal” ultimately means that these topmost trade union leaders have accepted the fact that the Nigerian working people and the entire poor will continue to remain victims of mass poverty in the midst of an inexhaustible means and potentials. When scientifically examined, the totality of the positions of both the NLC and the TUC, constitute basic truism, witty debate points, but totally devoid of fundamental prognosis and strategy of how to defeat this generally unpopular government policy.

In our opinion, the NLC was correct to demand that “our oil resources” be used for the benefit of the people, but as we in the DSM have always argued, this state of affair can only be possible under a government of workers’ and the poor peoples’ representatives that is committed to utilizing not only oil but all other major resources, under public ownership and workers’ democratic control and management, with the central goal of meeting the basic needs and aspirations of all and not just that of a few rich/billionaires as is the case under the prevailing unjust capitalist system. The NLC leadership was equally right to reject government’s excuse that it could not fight the so-called cabal manipulating and profiteering from oil prices in the name of fuel subsidy because it is not a military government. It is however wrong to simply argue that “what we need is a democratic process of bringing culprits before a court of competent jurisdiction and dispensing justice“. Apart from seeking to invest a non-existing “democratic” garment on Nigeria’s notoriously bureaucratic, corrupt and expensive judicial process, this response completely evades the challenge thrown to labour and the working masses by government’s admission of failure to combat this fundamental, central socio-economic disease. Yes, we agree with the NLC leadership that the ministers’ position in this respect is nothing but a rationalization or justification of high profile criminality. However, as we in the DSM had always argued, this criminality can only be properly brought to an end under a genuine workers and poor government where the major sectors of the economy are run through democratic control and management of working people themselves.

The NLC leadership was also right in denouncing the various arguments being put forward by the government to justify this anti-poor policy as either an after-thought or completely baseless. When reminded that previous hike of fuel prices had never yielded the much chronicled development, government’s spokesperson, the Petroleum Minister, Mrs. Deziani Allinson-Madueke revealed that government would this time around, constitute a “Think Thank” to manage the expected resources to be generated through stoppage of the so-called oil subsidy. The minister was also quoted on government’s plan to consult the so-called “stakeholders” on the advantages that would accrue to the country once fuel subsidy is stopped. Rightly, the NLC described these positions as mere after-thought, a process of putting the cart before the horse! In fact, the NLC rightly argued in response: “The reality is that despite the trillions of naira budgeted annually for these basic needs, the roads remain in a deplorable state, public maintenance is absent, mass transportation is non-existent, youths are abandoned as are the public hospitals leading to high mother and child mortality rates“. Therefore for us in the DSM, the central issue remains how to permanently bring to an end this process of colossal wastage and lootings of public resources at the expense of the well-being of the economy and the living standard of the people.

On the claim “that the proceeds of the subsidy removal will be managed by Nigerians of integrity“, the NLC leaders retorted wittily: “who are those managing the national economy and the annual budgets; if they are not Nigerians of integrity, why not handover the economy to such Nigerians“? Finally, the NLC leaders declared that the Jonathan’s administration decision to go ahead with the removal of the so-called fuel subsidy will displease 99% of the population and stated that “If government disproves this, it should subject its fuel subsidy removal to a referendum“. Doubtlessly, these are witty responses but they totally shy away from facing the basic reality. If government, even indirectly admits that its affairs had hitherto being run by Nigerians without integrity, the right response by Labour is to demand the immediate resignation of the government and offer its own preparedness to run government with democratically elected representatives of the working masses and not just to passively ask that government be handed over to “Nigerians of integrity”. Against the false claims by government’s spokespersons that the proposed fuel subsidy withdrawal is in the best interest of the economy and Nigerians, Labour in fact, should be frontally demanding the convocation of a truly democratic and elected Sovereign National Conference (SNC) dominated by the representative of the working masses and the poor not only to debate and decide the current policy of subsidy withdrawal, which Jonathan never mentioned during the recent presidential election, but also a host of other socio-political issues like the issue of whether Nigeria should continue to remain as a corporate entity, and if yes as we in the DSM would advocate, and how its diverse nationalities and religious groups should co –exist peacefully and with mutual democratic respect.

On its part, the TUC leadership position on this issue is politically more backward comparatively to that of the NLC “We urge the Federal Government to consider the concerns of various stakeholders as well as come up with how to grow the local refining capacity such that within the next five years, we will meet locally all our domestic demand for refined petroleum products in Nigeria, and such that within the next seven years, we will be exporting refined petroleum products to neighbouring African countries“. The TUC leaders like their NLC counterparts have not for a moment pondered over why none of the nation’s refineries are working optimally and why, of all the oil exporting producing countries, only Nigeria does not have sufficient functional refineries and rely on importation of refined oil products for its domestic usage. In the face of daunting, monumental failure of past hikes of fuel prices on the overall economic activities and peoples living standard, the TUC leaders are pledging to support government subsidy withdrawal policy once “government can demonstrate very clearly how the proposed policy of fuel subsidy removal will reduce poverty and unemployment in Nigeria“! The TUC also in what is no more than an understatement expressed the “fear that sharing the funds accruing from the removal of oil subsidy among the three tiers of government could trigger another round of corruption and inefficiency“. Yet the TUC further stated: “As for the much talked about cabal in the oil industry, we think that they are not bigger than the government and the country. If the government is determined, they can be brought to book and their activities adequately checked. We are also hopeful that the Senator Magnus Abe joint committee on fuel subsidy investigation in the operation and management of the oil subsidy in Nigeria will expose the huge corruption and inefficiency that exist in the management of the oil subsidy in Nigeria“.

To say the least, the TUC position quoted above reflect a ponderous perplexity bothering on ideological bankruptcy. On the one hand, the TUC knows very well that any additional funds accruing to the capitalist elite in power at all levels would only “trigger another round of corruption and inefficiency” but at the same time, the TUC leaders are expecting these same corrupt elements to bring the so-called cabals to book and also adequately check their nefarious activities. This unseemly position can only come out from elements appearing to seek change but lack the vision and preparedness to confront the unjust status quo! The DSM strongly warns that this kind of ambivalent and quasi radical propositions would only perpetrate the current vicious circle when what are required are scientific, socialist policies to break same.

BREAKING THE VICIOUS CIRCLE

Propositions like those criticized above would only make things worse than they are presently. This of course does not remove an inch the fact that both the NLC and TUC have done so much in fighting this purely pro-rich, anti-people policy. However, the fact that government has continually brought up this policy despite its well known debilitating effects on the real economic indices and peoples’ living standards (and despite the constant opposition of labour through the numerous general strikes and mass protests,) clearly and sharply underline the point that there is no way to stop this kind of anti-economic growth and anti-poor policy within the framework of capitalism. To effectively fight and defeat this kind of policy requires a clean break with the present rotten, self-centered system that inflicts mass misery in the midst of super and an inexhaustible abundance. And here lies the crux of the problem with the contemporary labour/trade union leaders and movements. To justify their positions before the masses, the NLC and TUC leaders have always put forward or support one form of demand or the other desired by their members and ordinary citizens within the framework of an utopian perspective of winning permanent improvement in the living standard of the masses without changing the current “money first” system of capitalism.

However, in reality a decisive fight and defeat of government anti-poor policy of fuel subsidy withdrawal is only possible within the framework of a working class revolutionary economic and political alternative. This is because the kind of reckless manipulations, profiteering and racketeering which have made it impossible for a major oil producer and exporter like Nigeria to be able to guarantee sufficient and affordable refined oil products for its economy and citizens are the same kind of problems that prevail in all sectors of the society. “Recently an industry source said that about 150,000 barrels of crude oil is stolen from their fields of operation alone daily. A former presidential aide claimed earlier this year that about 300,000 barrels are lost to thieves every day. More sobering was the estimate given by the former Speaker of the Federal House of Representatives, Mr. Dimeji Bankole, that as much as half of the nation’s daily production might actually be lost daily to thieves. Right now the figures being bandied by politicians suggest that 150,000 to 200,000 barrels may still be slipping through despite the vigilance of the various security outfits swarming the swamps“. (The Guardian, November 9, 2011).

While addressing this year’s harmattan school for trade union leaders, in Kaduna, on November 14, 2011, the NLC President, Omar Abdulwahed among other things stated: “The President Jonathan administration is also deliberately devaluing the currency in order to devalue the N18,000 National Minimum Wage and as part of its poverty-inducing measures. As we have stated elsewhere, government’s insistence to hike fuel price by 120 per cent will further complicate matters for a hungry citizenry that has to cope with growing mass unemployment and a nonexistent social security. The NLC described the proposed 100 per cent electricity tariff hike and there-introduction of toll gates for unmotorable roads as calculated attempts to allow constitutional amendments that will annul the minimum wage. He said: “NLC will never allow this to happen”. Omar also criticized the Federal government for deploying armed military men to the Power Holding Company of Nigeria (PHCN) Corporate Headquarters and other power stations, in order to forcibly privatise the company. The statement stressed that there are ongoing negotiations between the government and the Electricity workers on the power reform in the country with the next meeting scheduled for November 22. Warning on the implication of the government’s action, Omar said: “To send armed soldiers to occupy electricity installations is, therefore, a calculated attempt to stall the negotiations and impose a pre-determined solution that will see the power sector sold as scrap to serving ministers and other cronies of the Federal Government. (The Nation, November 15, 2011).

The capitalist rot and corruption remains a chronic disease that runs through the entire socio-economic system. The Guardian of November 9, 2011 published the following reports: “The Global Funds for AIDS, TB and Malaria, has alleged that individuals, organizations and government establishments in the country may have diverted money meant for the control and management of Human Immuno-deficiency Virus (HIV)/Acquired Immune Deficiency Syndrome (AIDS), tuberculosis (TB) and malaria for other purposes….The most recent of these claims is the alleged misuse of over N1.643 billion ($10.6 million) donor funds, which came to light in the country audit report of the Global Funds Grants to Nigeria by the Office of the Inspector-General (OIG) of the Fund“.

Against the background of the few instances given above, it should be crystal clear that what is needed to end the prevailing vicious socio-economic and political realities is a bold total revolutionary clean break with the prevailing pro-rich, anti-poor policies. Sadly, after enumerating the above-stated pervasive ills troubling the economy and Nigerian society, the NLC leaders merely: “appeal to the Jonathan administration not to toy with the prices of petroleum products as this will definitely lead to a conflagration in the country. The Congress advises the Federal and state governments to realize that there can be no force in the country greater than the Nigerian people from whom all power must flow. Those who have ears, let them heed this advice“. To say the least, this is like giving advice to those that are decidedly deaf because of self-serving material and political gains.

Instead of pushing this kind of futile perspective, the NLC and TUC leaders and pro-workers’ activists should immediately come out with concrete and practical proposals and measures that would galvanise the entire working masses and youths to rise up in arms to fight and defeat the current anti-poor policies and ultimately, the anti-poor government and elements behind this. The NLC and TUC leaders have been making enough noises about their opposition to the impending fuel subsidy removal or fuel prices hike. Now is the time to take the debate and agitation to the rank and file workers and ordinary Nigerians in their various communities and trades through mass meetings, leafleting and rallies.

The DSM proposes that the NLC and TUC leaders should immediately flag off mobilization and preparation for a 48-hour warning general strike to call on government to immediately and unequivocally abandon its decision to remove the so-called fuel subsidy by January 2012, immediately implement the recently promulgated N18,000 monthly salary to workers across the country, by both public and private sectors, without a single retrenchment, on the basis of an excuse of not having sufficient funds. Labour should, at the same time, spearhead an immediate end to privatization of public institutions like electricity, roads construction, education and the health care system. Labour’s demand must also include demands for massive public expenditure on job creations, housing, health care, education etc with a view to mop up the mountains of unemployment and chronic poverty that have rendered virtually half of the country’s population jobless and hopeless. Labour should also insist that proper conditions of employment be given to those lucky enough to have jobs and say total no to casualisation of labour.

Jonathan and the entire ruling elite through their myopic, pro-rich, anti-poor economic and political policies are driving Nigeria to a total dead end. According to media reports, Nigeria is currently experiencing the highest level of military mobilization outside eras of military rule, to barely maintain peace in many states of the federation, owing to escalation of ethno-religious violence, including those being perpetrated by Boko Haram, a right wing Islamic fundamentalist group. As we write, the government has deployed soldiers to occupy offices and installations of the PHCN across the country with an evident goal of forcibly defeating the resistance of the electricity workers to its plan to sell the nation’s electricity company to private, money launders. The overall socio-political implications of all these pro-rich, anti-poor policies and conducts may rapidly begin to evoke among sections of Nigerians a bad situation wherein the military known as the unrepentant enemies of the working people are being encouraged to see themselves as the messiahs.

This of course demands that the trade union movement and its leaders come up with a coherent and comprehensive agenda of struggle that is hinged on the masses ultimately winning the political power away from the current self-serving capitalist looters and thieves. Labour is facing a key test. This type of situation cannot continue indefinitely. If labour does not offer a way out of the country’s mess, other forces, military or otherwise, will try to step in. If the Labour leaders limit themselves to radical words and no action they will open the way to defeat unless a vibrant movement of activists from below can help transform Labour into a fighting socialist force. Only through this kind of perspective can ensure that the current agitations against the impending policy of fuel price hike can be successful and permanently won.