Editor’s note:President Muhammadu Buhari has been tasked by the Senate Committee on Petroleum with resolving fuel scarcity crisis within two weeks. ‘Yomi Kazeem, the Naij.com columnist, talks about the most appropriate strategies applicable to the petroleum sector — if the right steps are not taken, Nigerians would, again, be the ones paying for the government’s mistakes, this author states.
Earlier this year, the Nigerian economy literally shut down as a result of an extreme fuel crisis that was clearly the worst in recent times. Petrol stations were littered with long queues, banks could only keep their offices open for half a business day, and telecommunications companies announced that the crisis might affect the quality of service. Fittingly, it was tagged as the “petrolcalypse,” as Nigerians were helpless in the face of the crisis. After lasting for about two weeks, the crisis, which emanated due to subsidy payments — lack thereof — was resolved and things went to normal quickly.

At the time, most were pleased to simply get on with their lives. But six months down the line, Nigeria is back on its knees as the queues have reappeared across the country. Again, the crisis is connected to the controversial subsidy payments that have been on the forefront since the January 2012 Occupy Nigeria mass protests.

Predictably, the frequency of the issues around the availability of fuel across the country is sparking a debate on whether or not the government should retain the subsidy programme. While that debate rages on, another is emerging as some are beginning to question the wisdom of opposing the removal of fuel subsidy in 2012.

Occupy Nigeria was not all about subsidy

Three years ago, thousands of Nigerians poured into the streets and converged to protest the government’s decision to remove fuel subsidy and as a result increase the per litre price of petrol. On the face of it, it appeared that the protests were simply against the removal of subsidy. A deeper look suggests that, while the mass populace hated the idea of having to pay more for fuel and bearing the brunt for decades of a lack of strategy and direction in the local petroleum industry, there was just as much concern for the perceived lack of accountability — and by extension, credibility — of the administration in power. Removing the subsidy on fuel is in many ways a sound call but it is one that can only be done with the kind of administration that can be trusted to be accountable.

To pacify Nigerians, the government resolved the crisis by reducing the initial increase in fuel prices and directing the savings on fuel subsidy to a subsidy reinvestment program. Years later, the SURE-P program has been dogged by fraud, and its head, Christopher Kolade, walked away because SURE-P had lost credibility. Similarly, the supposed culprits involved with illegally benefitting from the subsidy programme have not been imprisoned.

It is clear that while the rise in fuel prices formed a basis for the Occupy Nigeria protests, the lack of credibility of the administration at the helm made it an even more bitter pill to swallow.

Going forward

The fall in oil prices globally has presented Nigeria with a big chance to remove the fuel subsidy. But so far, that move has not been made, and from indications coming from the presidency, it appears the subsidy will be staying.

However, in light of the strain it puts on the budget and how it affects the everyday lives of the same Nigerians it purportedly aims to make life easier for, the presidency will do well to rethink its stance. Removing the subsidy will mean an increase in fuel prices — something that many Nigerians are currently dealing with as there have been reports of per litre prices as high as N150 in some parts of the country.

The question is if Nigerians will welcome the increase just a few years after a similar increase was fiercely protested, and the answer to that is a yes.

What has changed?

Unlike the last administration, President Buhari has a tough stance on corruption and is far less tolerant of financial misappropriation. Given the vast amounts that can be freed up should subsidy be removed, it is important to have a fiscally responsible team focusing on using the savings from subsidy as prudently as possible. A failure to do that will mean that again, like many times before, ordinary Nigerians will be paying a rather expensive price for the mistakes of their leaders.