Fuel Subsidy: All the Lies, All the Fraud

RingTrue

By Yemi Adebowale

Phone 08054699539

The lies and fraud around removal of subsidy on petroleum products are endless. Hapless Nigerians are paying heavily for these. One of the deceits is that the landing cost of petrol is now N408 per litre. This is according to the Nigerian National Petroleum Company Limited (NNPCL), the sole importer of petroleum products. If you believe this, you will believe anything. NNPC brings in products through its opaque crude-for-fuel swap, now known as Direct Sale, Direct Purchase (DSDP). High landing cost is largely responsible for the N488 to N557 post-subsidy price announced for petrol by the NNPC on May 30.

The DSDP is dominated by corruption, inefficiency and skewed against hapless Nigerians. The inept and crooked consortia of traders being used, factor in all sorts of inflated costs, resulting in high landing cost. As a result, the DSDP, which commenced in 2016, has not been delivering fair and competitive petroleum products prices to Nigerians. If fuel importation is truly fully deregulated and the private players get involved, the price, based on current market rate of crude, will definitely not be anything near N488 per litre. Clearly, Nigerians are paying for the corruption and inefficiency of NNPC’s DSDP.

The NNPC told Nigerians last week that it had terminated its DSDP contracts. But the boss of the firm, Mallam Mele Kyari, who recently spoke on the issue, did not sound assertive. “In the last four months we practically terminated all DSDP contracts. And we now have an arm’s-length process where we can pay cash for the imports” Kyari told Reuters.

I have it on good authority that the NNPC still allocated crude for fuel swaps for July loading, though fewer than in preceding months. Also, in its report detailing March crude oil loadings, NNPC allocated crude to the swap contractors. So, Kyari can’t be talking about having stopped crude swap “in the last four months.”

Crude swap must end. NNPC’s monopoly on petrol supplies must also end. Private firms should be allowed to immediately join NNPCL (they must all source their forex from banks) in importing petroleum products, pending when Dangote and Port Harcourt refineries will start producing.

Another falsehood by the government is that smuggling of petroleum products to neighbouring countries will stop once there is no more subsidy. It’s a big fiction and a majestic celebration of weakness/incompetence of the federal government. No matter how high the price is in Nigeria, smuggling will continue because Nigeria remains the biggest source of supply to these countries. That was why within 24 hours of removing subsidy in Nigeria, Petrol price jumped to between 600 and 700 CFA in Benin Republic. Nigerian petroleum products are still flowing into Benin, Chad, Cameroon and Niger. It is sad that in these borders, we have thousands of Nigerian Customs men, claiming to be fighting smuggling.

The Controller-General of Customs, retired Colonel Hameed Ali, who, with his men, are saddled with the responsibility of tackling the smuggling, have failed to tame the menace. Smugglers are not invincible. Ali and his boys know them. They can drastically reduce smuggling if they wish to do it. This is the truth that must be told. A good government will hold Ali and his boys accountable. I’m surprised Ali is still keeping his job. Customs must be overhauled in order to reduce all forms of smuggling.

We have also been repeatedly told that only rich people are benefiting from subsidy on petroleum products; that they have a large number of cars and buy cheap fuel. So, it must go. Lie! big lie! Every Nigerian was benefitting at varying levels. The poor and working class were benefiting in terms of lower transport cost and lower food prices. Now, with the removal, the poor and working class are spending almost their entire earnings on transportation; earnings that can now barely sustain their living costs. Cost of doing business has also gone up. Businesses are groaning.

What about government stories that savings from removing subsidy will go into development projects? Immense lies! Savings from previous subsidy removals hardly impacted on this country. Our inept leadership siphoned almost everything. This is why beloved Nigeria remains in a tattered state, with infrastructures in a big mess. It is one of the reasons Nigeria is now the poverty capital of the world. We now have the largest number of people living under poverty. Now, we are being told the same old story; that savings from subsidy will be used to develop infrastructures. Tinubu has promised to re-channel the expected savings to education, health and other sectors. I doubt if this will significantly happen. I don’t trust in this government to spend the savings sensibly and make life healthier for Nigerians.

What about the double-dealing All Progressives government that ended petrol subsidy? When members of the party were in opposition, removing petrol subsidy was anti-people. They led the war against the Jonathan government in 2012 with the occupy Nigeria boloney. The current President, Tinubu, was in the vanguard of that movement. They told us that sustaining the subsidy was not a big deal and mobilised Nigerians against Jonathan with shameless lies. Jonathan was forced to beat a retreat. Now that they are in government, subsidy removal is good for Nigerians. What an irony!

Let me say it straightaway that the removal of fuel subsidy should have been a gradual one. Adding almost N372 to a litre of petrol in one swoop is outright wickedness. It amounts to death penalty for millions of Nigerians. The poor and the working class are gasping for breath. The Tinubu government should have started with not more than N250 per litre, and followed with quarterly increases. Before we get to the end of 2023, Dangote and Port Harcourt Refineries would have started production. The cost of shipping crude to Europe and shipping refined products back to Nigeria would end with local refining. This will bring down the cost of the product. Also, all the fraud and inefficiencies in the importation ought to have been frankly tackled, to reduce landing cost, before removing subsidy.

This confused federal government is now talking about reviewing minimum wage as if every Nigerian is a civil servant. They are also talking about palliatives as if it would have a significant impact on close to 200 million Nigerians. Today, I’m urging Tinubu to attract smart people into his government that can help him to pragmatically navigate the mess created with the removal of fuel subsidy.

Killings Under Tinubu

i doubt if President Tinubu knows what it means to hit the ground running with security. Two weeks after his inauguration, it is still business as usual for Boko Haram, ISWAP, Fulani militias, kidnappers, IPOB/ESN and all sorts of terror groups, ravaging our land and sending people to early graves. Under just the first seven days of Tinubu, 78 Nigerians have been killed in terror attacks across the country. This is according to the Nigeria Security Tracker, a project of the US-based Council on Foreign Relations.

Terrorists killed four and beheaded two persons in Rivers on May 29, while on May 30, they killed a vigilante leader and 24 others in Zamfara State. On May 30, terrorists killed a man and kidnapped his wife, and four kids in Kaduna State. Also, on May 30, they killed six persons in Rivers communities, while on May 31, gunmen in camouflage attacked a farm in Ogun State, killing three people.

On June 4, terrorists killed 37 people in Sokoto State. These are the reported cases. Many other killings in Tinubu’s first seven days were unreported. Guerrillas are still moving around in hundreds unhindered in the North. On Wednesday, terrorists released a pathetic video of villagers kidnapped in Kafin Koro and Kwagana in Paikoro LGA of Niger State, with a threat to kill them.

If Tinubu is talking about wiping out terrorists, the men in charge of the war ought not to be in office by this time. I can’t understand why the security chiefs are still in office. These people have become merchants of lies, rolling out imaginary security achievements. This country needs help from abroad. I can’t see signs that Tinubu is looking towards foreign military contractors. Tinubu is not showing signs that a new Sheriff is in town. I sincerely hope that Nigeria is not in for the continuation of attacks by guerillas.

Hadi Sirika Should Be in Jail

Former aviation minister, Hadi Sirika, hired the Nigeria Air plane that landed at the Abuja Airport on May 26 from Ethiopian Airlines, just to deceive us about actualising his promise to birth a national air carrier before the expiration of the Buhari government. It was a chartered aircraft temporarily fitted with the logo of Nigeria Air for the fraudulent unveiling of an airline that has no operating licence. The aircraft returned to Ethiopia the next day and the Nigeria Air logo was yanked off.

These were some of the revelations at the National Assembly early this week when lawmakers grilled those behind that show of shame. The main man, Sirika did not appear. This is the same man that inaugurated Nigeria Air in 2018 without any plane or management in place. Sirika spent over five years milking this country with this fraudulent project. It is estimated that Sirika spent about N85.42 billion on the failed project between 2016 and 2023, including payments to transaction advisers, useless trips to promote the airline, working capital, and other consultancy bills.

Sirika flushed public funds down the drain on the proposed airline. I can’t forget how he wasted money during the Farnborough air show in London in June 2018, to announce the birth of the airline without a single aircraft. It was a show of shame because no foreign investor participated at that fraudulent launch.

The amount expended on the failed Nigeria Air project is frightening. In countries where public officers are held accountable for failures, Sirika would be in jail now for wasting public funds on this drivel.

Sirika pretends to be unaware that it is no longer trendy for countries to set up national airlines. The world has gone beyond this. I’m shocked that the Buhari-led Federal Executive Council gave approval for this garbage. What will the national carrier do that existing flag carriers can’t do? The revival of a national carrier can’t be of any economic benefit to the suffering masses of this country. So, why waste public funds on it? I am not sorry to say that Sirika was more concerned about personal gains from this adventure. No doubt, he has gained a lot.

The former minister calls the proposed airline our national carrier, yet, it would be owned 49 per cent by Ethiopian Airlines. How can that be a Nigerian carrier?

The Chairman of United Airlines Nigeria, Obiora Okonkwo captures this misnomer rightly: “We have not seen anything Nigerian in this Nigeria Air. It is a camouflage of interest.”

Today, I am calling on the Tinubu government to perish the idea of this Nigeria Air rubbish and support current flag carriers to utilise this country’s slots in existing Bilateral Air Services Agreements. Besides, a national carrier cannot be the priority of a country swimming in debt. It cannot be the priority of a country in which the security and welfare of the people are currently in shambles. The focus of a good government should be on critical sectors like security, health and education. Airline businesses are better left to the private sector. This is now the standard in decent climes.