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By: Ifeanyi Izeze
How do you reconcile that barely three months after we were told it was stopped in January following the review of the pricing template of the product, the Federal Government on Saturday 1st April 2016, brought back subsidy on premium motor spirit otherwise known as petrol?
Since subsidy was identified as an unnecessary drain in public treasury benefiting only a few privileged individuals, the government discarded it and everyone was happy. Is it not insulting to our sensibilities to reintroduce this scam again or is the present government saying it has discovered the scheme was not a scam afterall? Why has it become so difficult in this country to use common sense to address the problems confronting us in all facets of our life as a nation, and for how long is Nigeria going to bow to criminality?
Do we still need a seer to now tell us that something is surely wrong with managing everything oil in this country that urgently needs to be thoroughly addressed- not political solution of naively asking Kachikwu to swear on the date scarcity would end forever in Nigeria?
What is this funny conscription- the Petroleum Products Pricing Regulation Agency (PPPRA), still doing as a government agency when every day we hear that this government had discontinued the subsidy scheme? So which price differentials have they been working out and to what end if actually there was any time government stopped subsidy? Recall that this interesting agency-the PPPRA came into existence just to calculate the price differential between the government-regulated prices of fuels products and the landing costs, handling costs and the marketers’ allowed profit margins. So if we have discarded this fraud -invested arithmetic, what is this organisation still doing- introducing confusion in price templating? What is wrong with us as a people?
Does it not occur to President Buhari as the authentic or rather substantive minister of petroleum that the more the delay in casting out this demon called PPPRA, the more probable it becomes for this same agency to bring down this government like it did before to the Jonathan rule in our recent history? Mark my words and let those who have ears, hear!
If Government is not paying any form of differential in cost of the product, why does it still stick to this funny policy of always pegging open market price of petrol, kerosene and the rest of them? Couldn’t it have been better if the official price of petrol was adjusted slightly upward instead of throwing money into a bottomless pit for these insatiable marketers and their cronies in the corridors of power? Afterall, there are only few locations across the country that the product sells actually at the so called regulated price. And where you even buy at the government price, the volume is usually short of whatever you paid for even in NNPC mega and franchise stations. So who is fooling who?
And how can PPPRA say that there is no going back on subsidy removal when as we talk now, the landing cost of petrol stands at N92.34 which is above the government-pegged retail price by N5.84?
Interestingly, despite serial denials of recommencement of the subsidy scheme by the PPPRA, now petrol is to be subsidised by N5.84 for every litre consumed in the country meaning we are still where we were: all motion, no single progress in frontally taking on the problems in the hydra-headed downstream products availability and distribution sub-sector.
For instance, figures from the latest pricing templates of the Petroleum Products Pricing Regulatory Agency released on Saturday 1st April showed that the Federal Government was paying N5.84 as subsidy on every litre of petrol sold at non-NNPC filling stations.
According to PPPRA, the agency of the Federal Government that regulates the prices of white products (petrol and kerosene) across the country, the Expected Open Market Price (EOMP) of petrol for non-NNPC stations as at April 1, 2016, was N92.34 per litre, against an official pump price of N86.5 per litre, leaving an under-recovery or subsidy of N5.84 per litre.
The EOMP is the actual cost of petrol without subsidy and comprises of the landing cost of the product as well as its subtotal margins like transporters’ charge, admin fee, dealers cost, bridging fund, etc.
Similarly, the template for NNPC-run stations showed that the government was paying N5.80 per litre as subsidy, as the EOMP for outlets in this category was N91.80 per litre as against an official rate of N86 per litre.
In the words of the Acting Executive Secretary, PPPRA, Mrs. Sotonye Iyoyo, as reported, “The agency is retaining the retail prices of N86.00 for the NNPC and N86.50 for the other marketing companies. The pump price of household kerosene also remains unchanged from what it was in the last quarter.” What kind of confusion is this?
Whether anyone wants to hear this or not, using subsidy as a means to addressing the lingering issue of fuel scarcity can never work with the corrupt system we have in place. The importers/marketers are corrupt, the petrol station operators are corrupt, the buyers/end users are corrupt, and everyone involved in this fuel business is corrupt! So how are you going to ensure we are not going to end up with fraud scandals similar to the ones allegedly unearthed by this administration as they took over power?
This lingering fuel crisis borders solely on availability of the commodity- petrol! Both issues of diversion and vandalism of product lines are consequences of non-availability. If there were enough products for our domestic use, diversion of loaded trucks from Lagos to Ogun or Oyo or from Port Harcourt to Aba or Uyo would not create the hard-biting nation-wide scarcity we are currently facing. So can we increase NNPC’s ability to make fuel available? This is what this government should be thinking about and part of this is outrightly deregulating the downstream without any iota of ambiguity.
(IFEANYI IZEZE lives in Abuja and can be reached on: iizeze@yahoo.com; 234-8033043009)