Finally, the Nigerian government did it. It “semi-deregulated” the price of the premium motor spirit (PMS) or petrol as lay people know it. As of Wednesday May 11, you could no longer drive into any gas station and fill your tank at N86.50/litre. Instead, you would have to cough out between 135 – 145 Naira per litre. Depending on where you buy the product in the major cities, especially Abuja, the price varies, with most pegged at the apex of official price band.
One hundred and forty-five Naira per litre of oil is very high for ordinary people. But if truth be told, majority of Nigerians had been paying that amount for many years now. In some parts of the country, fuel was never sold for the so-called official government price of N86.50 per litre. While petrol stations in Abuja and Lagos sold at the official price, those who live outside of these two major cities coughed out between N100 and N145 for a litre of petrol.
I am an advocate of petrol subsidy for Nigerians. But taking into consideration the fact that we never got the implementation of this subsidy policy right, instead, it was used it create emergency billionaires at the expense of the majority of people, the best option, at least for now, was to review it.
In years gone by, the Nigerian Labour Congress, NLC, then led by Adams Oshiomhole, had argued for what it called ‘guided deregulation’, a policy that would enable government to deregulate the downstream petroleum sector in phases, gradually opening up the petroleum space but without too much hardship on the people. It was to be a process of give-and-take whereby for every phase of subsidy removed, government guarantees Nigerians something such as affordable public transportation. This was to be in tangible form rather than in anticipatory
In 2003, the government of Olusegun Obasanjo set up the Independent Consolidation Committee on Cushioning measures, as a reaction to Labour’s call for strike following a hike in petrol pump price then. Oshiomhole, who is now the governor of Edo State, Ngozi Okonjo Iwaela (then Finance Minister), were members of that Committee, in which I represented the Nigerian Guild of Editors. Then Senate Deputy President Ibrahim Mantu, was Chair of the Committee, which worked out a set of palliatives to cushion the effect of petroleum price increase. Were those palliatives ever implemented? If they were, perhaps things would not be as bad as they are today.
In December 2015, the Kingdom of Saudi Arabia raised its domestic energy prices by 40 percent. In making that announcement, Al Jazera, the Dubai-based 24-hour news channel quoted the Kingdom’s ministry of finance as saying that the subsidies slash for electricity, water, diesel, and kerosene would be done over 5 years.
What I find interesting in the Saudi style subsidy policy reversal was its phased removal on products that affect the mass of the people, to enable them adjust to one before the next phase was implemented. And this is in a country where public transportation exists.
We live in a country where successive governments had failed to provide conducive environment for the provision of services and amenities needed to set a nation on the development path – electricity, decent public transportation, decent hospitals and in fact, recreational parks.
Therein lies my worry at the timing of the May 11 announcement. It reminded me too much of the recent hike in electricity tariff, which was trailed with blackout around the country rather than an improvement in electricity supply.
In announcing the subsidy removal on petrol, we were told that adequate safeguards to cushion the effect of the price increase had been built into the 2016 budget. That is all fair and good, but should the implementation of those measures not have commenced before the implementation of the new price? Should there not have been evidence of public transport system, constant electricity (in my country home – Umuihi in Imo State), there’s been no electricity supply for more than 3 months!)
Truth is that ultimately, every nation subsidizes something to help its people, especially the poor. What is Nigeria subsidizing for its poor? Whether they live in the countryside or in squalor in the nation’s major cities, the poor in Nigeria struggle to provide “housing” for themselves, electricity, the roads they trek on, pay school fees for their wards, clothe them and put food on the table. They do all these without any form of assistance/subsidy from government.
These are issues I expect Labour to constantly take on, on behalf of the workers whose salaries have remained the same in the face of constant hikes in costs of amenities. Labour was not set up to protest price hikes but to ensure the welfare of Nigerian workers, which in addition to the above, also include timely and adequate remuneration for job done.
It should constantly dialogue with government and other employers of labour whose staff are unionized under either the NLC or Trade Union Congress (TUC) to ensure that policies that enhance workers’ welfare are implemented.
Angela is a former Head of the Public Relations and Information Department at OPEC. She wrote in from Abuja. You can contact her on [email protected]