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The persistentfuel crisis Nigeria has been made to undergo reflects the
curse which oil hasbecome to an oil rich country; in fact, the sixth
largest oil producer in theworld. That curse shows glaringly in the
paradox that such an endowed countryalmost wholly depends on imported
finished fuel products for driving its energyneeds. Yes, the country has
drunk full from the blessings from oil. Oil hasyielded bountifully since
it was discovered in commercial quantity. Oil hasyielded rich harvest to a
country that is equally blessed with other resources.But from all indices,
oil has rather led to a harvest of tears and regrets as itsdiscovery marks
the abandonment of other resources in preference to theeffortless mining
of oil and the huge payoff that comes from crude. How best toshow this
than that before the advent of oil, Nigeria was running veryefficiently as
an agricultural nation where cash crop was the source of anefficient
system that benefitted the people and added greatly to the
countrysinfrastructural base, but has been abandoned in the craze for oil
wealth?
When oilcame, Nigerians changed focus, abandoned agriculture and other
income sourcesand all attention was diverted to oil, with its rich harvest
of petro dollars.Curiously, as oil gained traction and indeed, transformed
into the nationssole revenue earner, corruption blossomed, development
stymied and the masspoverty increased. With oil as the countrys sole
revenue source, the directiveprinciples of state policy assumed a deadly
tenor as the struggle to corner oilresources came to define governance,
politics and relationship between thecombustible ethnic units that make up
the country. With oil, deep fissures anddivisions emerged not only between
the various people that make up the countrybut between the classes as
closeness to oil came to define the strata of thesociety.
Oil seemedto have funded only the huge corruption complex that came with
it. With thegovernment fixated on sharing oil revenue, other sources of
revenue were allowedto go extinct and a social system that calibrated the
citizens along the oilchain emerged. Attachment to this chain became a
defining charter in ournational scale as oil gained importance in the
international commodity market.The stupendous rise in the price of oil
added to the problem as Nigeriansstruggled to get attachment to its high
yielding chain. But these nevertransformed to the wellbeing of the people.
What more, there was no noticeableimprovement in the oil process. There
was no noticeable indigenous input in thesector. The exploration and
mining were wholly outsourced and left in the handsof expatriate companies
and the modest state investment in refining either forlocal use or even
exportation was not improved upon. What rather emerged is acache of
indigenous petrol importers and marketers who exploited thehelplessness of
the Nigerian people to grow exceedingly rich merely by fiddlingwith
imported petroleum products. Curiously, they made no attempt to ploughback
the illicit wealth they got from this mindless exploit to the
developmentof the sector.
The abovescenario has been grown and allowed to blossom for many years now
to not onlymake Nigeria wholly dependent on imported fuel but susceptible
to the tempestuousnessand vagaries that follow the international oil
market. The crux of the matteris that refineries built by past military
regimes have been allowed to rot awayby successive governments before the
advent of the present regime who haverecovered some chunk of their
operational capacity to ease what would have beena very messy situation.
At a fully operational refining capacity of 450,000daily, the existing
refineries fall hugely short of the petroleum needs ofNigeria at present.
Yes, they were built for the needs of the country at thetime they were
built but there was that inherent supposition that successivegovernments
would be adding to them as the needs of the country blossom withexpanding
population. But nothing of that sort was done for decades now.Rather, as
the corruption complex around the oil industry quadrupled in leaps
andbounds, these refineries served as conduits for multi-billion Naira
looting inthe guise of unending turn-around maintenance contracts that
never improvedtheir lots.
As therefineries were used for massive stealing, they rotted away till
they became inoperablescraps from which the present government has battled
to recover someappreciable degree to support the local fuel demands.
Because successivegovernments found it so attractive to depend wholly on
imported finishedproducts, no efforts were made to either rehabilitate the
existing refinery or addnew refineries. What more, fuel importation became
a huge cash cow and aflowering corruption font for enriching sundry
interests by successivegovernments. This paradoxical state where Nigeria,
as the sixth largest oilproducer on earth, became the largest net fuel
importer gradually grew and withit, a gargantuan corruption that soon over
swept the entire country and becamethe main business in town.
Because thefluctuations in the international crude market was bound to
affect this dependentregime, it was impossible for fuel importers to
consistently fiddle with fuelprices as crude prices fluctuate as this was
bound to unleash chains ofunpalatable social crisis, the government will
have to subsidize imported fuelprices for there to be a stability in
prices. This was what led to thenotorious subsidy scheme, which itself
became another huge cesspool of fleecingthe country and expanding the
frontiers of corruption. Subsidy, as a policy,would have been a non-issue
if Nigeria has optimal refining capacity to ensureadequate supply of
refined petroleum products for its expanding populace. Theexisting
refineries were designed for a population of between 50 and 60million, at
optimal operation capacity. With our population at over 180 million,there
is no doubt that the existing refineries, even if they were operating
atfull capacity, would merely meet the needs of a little fraction of
ourpopulation. So there was need for regular maintenance of the
existingrefineries to keep them at optimal level while building new
refineries forNigeria to meet her local fuel needs but these imperatives
were all abandonedand Nigeria made to depend on imported fuel. So subsidy
would not have happenedif Nigeria had full refining capacity and crude
supplied to these refineries attolerable local price.
So, theNigerian oil industry was converted to a huge corruption complex
and theordinary Nigerians were structured as the ultimate brunt bearers
and financiersof this massive corruption. Over the years, the corruption
has been deepened.Since President Buhari came to power, there has been
decisive actions tounhinge this deeply rooted corruption and this led to
the expunging of thehugely corrupt subsidy regime that was so manipulated
to corruptly enrich manyinterests that are attached to those in power. But
then, without local refiningcapacity, it would be difficult to control the
price of fuel without somehow,subsidizing the price of imported fuel in
the midst of global fluctuation inoil prices. That is why we are having
the supply glitches we have been havingsince December and the government
should be bold to address it.
Methinksthat a highly controlled and transparent subsidy regime, not the
scrambledcorrupt subsidy scheme that existed before Buhari came, would be
in order. Thepresent government should weigh in with a transparent subsidy
regime that takescare of the rise in petroleum products to ensure that the
present price regimeis not tampered with. There is nothing wrong with a
transparent subsidy process.Why Nigerians were against the subsidy regime
before now was because of thewidespread abuses and total lack of
transparency that attended it. It got to apoint the immediate past
government paid a whopping N2.1 trillion as doubtfulsubsidy to oil
marketers without corresponding supply of imported fuel. Withthe vastly
improved transparent culture this government conducts its policies,I
believe it can enthrone a transparent and open process of
subsidizingimported refined products so as to ensure that Nigerians are
not subjected tothe whims and selfish caprices of hawkish petroleum
importers.
All said,the tremendous promises of the Dangote refinery, which promises
to startoperation next year, should gladden the hearts of Nigerians that
somehow, a Nigerianhas come to the rescue from many years of official
ineptitude and corruption.The Dangote refinery is expected to end this
cyclical embarrassment of totaldependence on petroleum products and the
businessman needs commending for thisgiant intervention. Is it not curious
that the many other people that made hugegains from the corrupt twists in
the petroleum industry never deemed it properto invest the loot they got
from the oil sector into developing the sector asDangote is doing? He
deserves our kudos but before his refinery comes on steam,the government
must develop a supply template to keep the product available toNigerians
while not increasing the price to reflect international crudepricing. The
only option is a transparent subsidy regime that will take care ofthe
difference between the present landing cost of imported fuel and
theexisting controlled price of petrol. There is no way out of the crisis
thanthis.
Peter ClaverOparah
Ikeja,Lagos.
E-mail:peterclaver2000@yahoo.com