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Still in the mire

News » Editorials

Date: 13th, MARCH, 2013


We have only scorched the snake, we have not killed it. This seems the most succinct way to frame the unending crisis in Nigeria’s downstream petroleum sector, especially as it concerns the so-called Federal Government subsidy regime. Just last week, some marketers had cried out that government which disburses the subsidy refund largesse owed them about N100 billion. According to them, this consists of outstanding claims from last quarter of 2012 up to the beginning of March, 2013.

Last December, the National Assembly had approved a Subsidy Sup plementary Budget of N161 billion, but marketers claim that it was not enough to clear the backlog of claims arising from various committee reports on last year’s subsidy crisis. What seemed like a subsidy bazaar was uncovered early last year after Nigerians embarked on a nationwide protest, following the January 2012 fuel price hike. The protests forced government to review its subsidy management process which revealed unbridled corruption and fraudulent practices.

Many oil marketing companies and individuals found to have been fleecing the country of billions of naira through spurious subsidy claims and outright forgeries are currently being prosecuted. Even the current regime of subsidy payout has been redolent with malfeasance as claims and counter claims of underhand payments have been filtering out. The situation is still terribly unsavoury if we consider that we are dealing with an issue that touches the very economic nerve of the country.

We are indeed talking about a very huge slice of Nigeria’s economy: the 2013 subsidy budget is N971 billion. Going by last year’s record, this is sure to get bloated far beyond a trillion naira. This amounts to over one quarter of the total federal budget. What economic principle allows a country to spend this quantum of her total budget to import refined fuel, especially when such a country is a major exporter of crude oil? While it is bad enough that such huge resource is devoted to imported fuel oils, we are worried sick that there is no order to the ‘madness’ of fuel subsidy disbursements.

In other words, we are spending over a trillion naira and there is no known structure, no template, no clear guidelines and no transparent process that can be subjected to public scrutiny, and it is difficult to know who is being paid what. Recall that some members of the Federal Executive Council (FEC) were recently accused of receiving subsidy payments. This is what happens when a process is not transparent. The entire subsidy regime simply put, is still in the mire.

There could not be a worse spell than this and we concur that rich oil wealth is indeed, the poverty of Nigeria. Since the abrupt hiking of the petrol pump price in January, 2012 from N72.00 to N141.00 (later reversed to N97.00) and the attendant mass protests, not much has changed. All the promises of palliatives for the populace have seemingly dissolved in fresh controversies. The Subsidy Reinvestment and Empowerment Programme (SURE – P) and all the various committees arising from the crisis, including the reassurance of expedited action on four Greenfield refineries have remained mere rhetoric.

It is indeed otiose for us to state that this state of affairs in Nigeria’s oil sector is unsustainable and in fact, could lead the country to perdition. For the umpteenth time, we urge government to take a holistic look at the oil industry and effect a total revamp; a move which will include initiating modern refineries, petrochemical complexes and setting a deadline for abolishing the importation of refined petroleum products. This is the way to go.

Article Credit: The Nation News

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