REDUCTION IN FUEL PRICE IS A GIMMICK AND INTRIGUE TO IMPOSE DEREGULATION
REDUCTION IN FUEL PRICE IS A GIMMICK AND INTRIGUE TO IMPOSE DEREGULATION
The Socialist Party of Nigeria (SPN) sees the reduction of petrol price from N87 to N86.50k as a mere gimmick and intrigue to deceitfully impose on the poor Nigerian working people the neo-liberal capitalist policy of deregulation of the downstream oil sector.
The pump price reduction announced by the APC-led FG is just a smokescreen! This 50 kobo reduction is not just too little, in fact it is an insult to many Nigerians who have been buying fuel, at great pains, for N120 and above for nearly 2 months now. The major motive is to deceive the suffering masses and douse their possible anger and opposition against the age-long plan of the ruling elite to remove the controversial fuel subsidy which its removal was skilfully effected simultaneously with the pronouncement of a slightly reduced pump price regime. ‘Price modulation’, a euphemism for deregulation, will in inevitably the long run ensure that prices of petroleum products go beyond levels affordable by ordinary and poor working class Nigerians.
Given the enormity of various economic hardships the Nigeria working masses are currently going through, it requires no soothsayer to know that the meagre reduction in pump price will bring no significant economic relief to the suffering masses. Even if it does for a start, it is not going to last!
It is common knowledge that, before the 50 kobo reduction, the official pump price for petrol was N87 per litre. But this was at variance to the economic reality across the country. Despite the government media propaganda and grandstanding, the pump price of petrol across the country today still range from N120 to N140/litre at most filling stations. This is a manifestation of failure of the combined forces of DPR, DSS, Civil Defence and other security agents to force the filling stations to sell at the official price.
If the government could prove so feeble to curb the illegality being perpetrated by fuel marketers and filling stations who sell fuel above the then official price of N87 at a period when it officially had some control over the sector, then how efficient can we expect it to be to keep prices of petroleum products at affordable levels in an era of deregulation or price modulation? The FG’s recent promise that its newly invented price modulation band will be effective in making sure that no fuel marketers sell above official price is nothing but a fluke! As at today, only a few people can attest to buying fuel at the new official price of N86.50k.
Even if the government is sincere with its regulatory mechanism, the caveat that the reduced pump price will be subjected to a review on quarterly basis, leaves room to suspect that the motive behind the whole reduction of the pump price is to trick the working people to accept the removal of subsidy and thereby hand over the sector to fuel importers and marketers who have always made it a past-time to subject Nigerians to chronic agony through artificial fuel scarcity in order to boost their profit.
Given this prevailing circumstance, there is high possibility that the so-called reduced pump price will sooner or later be hiked thereby spelling more economic doom on the mass of Nigeria working masses as there will be astronomic increase in the cost of transportation, education, housing, general services and goods. The current meagre 50 kobo reduction is based on the collapse of crude oil price on the world market. So low is the landing cost of petroleum products at the moment that the volume of subsidy payment, apart from backlogs owed marketers, is so insignificant. Had it been Nigeria had the capacity to refine much of its own crude, fuel price should by now be as low as N20 per litre or less in a situation where crude sells for $37 per barrel or less. The flipside however is that this period of collapsed crude price could at some point give way to rising prices. If this happens, the policy of ‘price modulation’ (a euphemism for deregulation) would most certainly mean that prices of petroleum products would go up in tandem with rising crude prices. It is in view of these inevitable economic consequences that SPN continues to maintain it opposition to both the removal of subsidy and deregulation of the oil sector.
This however does not means that SPN favours the current regime of subsidy fraud whereby subsidy claim is often used by few rich ruling elites in both business and polity to enrich themselves at the expense of the working people. As a matter of fact, SPN condemns the criminal act of using dubious and unholy subsidy claim to transfer public funds that could have been invested in public funding of social utilities like education, health, infrastructures to the pocket of few privilege Nigerians.
However, considering the enormous negative consequence the removal of the subsidy has in compounding the economic woes of the working masses, SPN disagrees with subsidy removal and instead demands that fraudulent subsidy beneficiaries be brought to book, refineries made functional and the entire oil sector be placed under public democratic control and management. Any other course of action will amount to nothing but an attempt to force or deceive the poor to suffer for the crime committed by the few rich Nigerians who had suddenly become billionaire through the so-called subsidy regime.
President Buhari, in his end of year interview, stated that “now, none of the refineries is working” but added that “by the end of the next quarter, you will not be talking of subsidy … The cost of petroleum is so low that you don’t have to subsidise it” (ThisDay, December 31, 2015). But, at best, going by bitter past experience this is wishful thinking, at worse it is simply a smokescreen for another attack on living standards.
This is why the SPN demands that President Buhari must order the immediate arrest and probe of all the individuals and corporate bodies that have been indicted in the over $1.1billion reported subsidy fraud. However, past experience is that government enquiries into corruption either cover up who the real thieves are or simply concentrate on the ruling party’s opponents. That is why the SPN calls for an open investigation by labour and democratic organisations into both the fuel scandal and the wider question of what has happened to huge income from oil and gas exports. We also demand seizure of their assets and freezing of their accounts as a step to recover the loot from them with a view to invest same to revamp the existing four refineries and build new ones to ensure that the estimated 40 million litres of petrol allegedly needed for daily domestic consumption are refined locally.
With this approach, combined with a democratically controlled and accountable economic plan, the SPN is convinced that subsidy payment will automatically disappear without bringing any economic hardship on the Nigerian working masses as it will open up the possibility for the pump price to be much cheaper than the so-called deceitful N86.50k pump price announced by the Federal government. At the same, this will bring an end to the dubious regime of fuel importation by oil marketers and middlemen. It will also reduce undue demands for foreign exchange thus opening up the prospect for the value of Naira to be boasted.
Given this background, SPN calls on Nigerian working people which comprises of workers, unemployed youths, students and all oppressed strata of the society not to be carried away with the deceit of the pump price reduction. The SPN notes and welcomes the position of the Nigeria Labour Congress (NLC) to “Resist Removal of Fuel Subsidy through the Back Door” and its “directive to our State Councils and Industrial Unions to commence the process of mobilization” (December 29, 2015 statement by NLC General Secretary, Peter Ozo-Eson).
However, the NLC’s 2016 New Year Day message does not mention any “mobilization” or say what actually should be done. It simply states “What we are against is the IMF-inspired fuel price deregulation. The current 50 kobo reduction in fuel price is obviously a gimmick.” This is true, but leaves the issue hanging in mid-air.
Concretely, as a first step, the SPN calls on the leadership of the NLC and Trade Union Congress (TUC), to immediately convene a conference of trade unions, students, socialists and civil society activists to kick start a practical mobilisation of Nigerians to resist this insidious means of carrying out anti-poor onslaughts on Nigeria working people! At the same time initiatives should be taken at state and local level to bring together activists to discuss what can be done to begin mobilisations to help build a movement that can resist the attacks which the economic crisis will bring.
This kind of conference, can also be used to agree on a more practical strategy to form a true and genuine workers and poor people mass-based political party that can fight for the establishment of a pro-working people government that will rest on a socialist programme of nationalising the commanding heights of the economy under a democratic control and management by the elected representatives of the working people.
The need for the labour movement to take the approach of moving the entire Nigeria working masses in this direction is more expedient now than ever especially when the entire members of the capitalist ruling elites and government formed by their various respective political parties (APC, PDP, APGA, ACCORD and the misnamed LP) have proved incapable to move the country forward on the basis of their capitalist policies of privatisation, deregulation, liberalisation, among others.