The unexpected announcement
The federal government’s announcement of an increase in the pump price of premium motor spirit (PMS), otherwise called petrol from N86 per litre to N145 per litre on Wednesday, May 11 came as a shock to many Nigerians who never saw this change coming.
The announcement of the new pump price was disclosed by the minister of state for petroleum resources, Dr. Ibe Kachikwu, at the Presidential Villa, Abuja.
Kachikwu said the decision was reached at a stakeholders’ meeting presided over by Vice-President Yemi Osinbajo and attended by the leadership of the Senate, House of Representatives, the Nigeria governors’ forum and labour unions, including the Nigeria Labour Congress, Trade Union Congress, Nigeria Union of Petroleum and Natural Gas Workers, and Petroleum and Natural Gas Senior Staff Association of Nigeria.
According to him, the new pump price will ensure increased supply and stabilise the quantity of petrol in the country.
He said: “We expect that this new policy will lead to improved supply and competition and eventually drive down pump prices, as we have experienced with diesel.
“In addition, this will also lead to increased product availability and encourage investments in refineries and other parts of the downstream sector. It will also prevent diversion of petroleum products and set a stable environment for the downstream sector in Nigeria,” Kachikwu said as reported in the Nation newspaper of May 12, 2016.
No doubt, the issue of subsidy has remained a focal point of discus in Nigeria owing to the huge subsidy payment which costs the federal Government colossal sums to the tune of about N1trillion annually.
Many Nigerians agree that the payment on subsidy has been shrouded in fraud following allegations that some independent marketers hide under the guise of the policy to stake claim to monies they didn’t work for.
However, the way the Buhari administration unilaterally carried out the hike in the price of petrol appears to be insensitive to the plight of Nigerians whose purchasing power to get petrol has been hindered by economic challenges.
Buhari the serial promise breaker
It is surprising that President Muhammadu Buhari who has earned the reputation for backtracking on his campaign promises, just like a DJ switching songs from reggae to blues, has hiked the price of petrol in a coup like fashion after promising not to do so during his campaign.
Few months ago, Buhari also reiterated his resolve not hike the price of petrol on the grounds that doing so trigger rising prices on transportation, food and rents. But having earned the reputation as a serial promise breaker, Buhari hiked the price in defiance to his promise not to do so.
Following suit in this reggae to blues rhythm change,the minister of state for petroleum resources, Dr. Ibe Kachikwu who has consistently promised and failed to make petrol available to Nigerians said the new price for petrol “will also lead to increased product availability and encourage investments in refineries and other parts of the downstream sector”.
The above claim by the minster that the hike in pump price will encourage investments in refineries in the country is a paradox to his statement in March that importing petrol is cheaper than producing the product in the country’s refineries.
Rather than removing subsidy entirely, the present administration could also have sanitised the subsidy regime and continue with the process knowing that this is the only way majority of Nigerians get to benefit from their government which has consistently failed to provide basic infrastructure such as good roads, electricity, water, the list is endless.
Even if the administration was bent on removing subsidy, it should have put in place a process which would have allowed subsidy to be effaced gradually.
The whole subsidy wahala resulted from the mismanagement from successive government which made Nigeria dependent on importation of petroleum products despite being the world’s sixth largest oil producer.
Added to this, successive administrations also failed to check the serious transparency issues which shrouded the subsidy payments for several decades. In other words, corruption was the problem and not subsidy because governments in other parts of the country offer subsidies on essential services to their citizens. But in Nigeria, subsidy became an avenue for cronies of politicians to siphon the nation’s resources.
More reggae to blues policies to follow soon
Whether they call it deregulation of the downstream sector, or removing subsidy on petrol, what, President Muhammadu Buhari and, Ibe Kachikwu should realise is that the common Nigerian who struggles to pay transportation and fuel his generator to avoid dying of heat rash sees this hike in fuel price as a punishment they don’t deserve.
While the APC administration continues to fantastically bring about the illusive change they promised by backtracking on their uncountable promises, I guess Nigerians will have to brace up for more reggae to blues policies by the administration. Do you agree with me?
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