Let us begin with some knowns. First, Nigeria, a giant of OPEC, does not produce enough fossil fuel for the needs of the populace. Second, while the crude oil it produces is dwindling by the day due to sabotage on many fronts, it lacks the facilities to refine the little. Therefore, it has to outsource to more expensive refinery locations. Third, it thus has to rely on importation of refined products with predictable hardship for its poor masses. Fourth, NNPC, the national oil company, does not have adequate resources for importation. Therefore, it relies on oil marketers as contractors. Due to foreign exchange scarcity, the government has had to subsidise the pump price. This much we know.
Next, to the public at least, there are a few unknowns. First, the pricing of petroleum products by a government agency is arguably a misery. What is the formula? Kerosene, a household product that is used by the poor and needy, has been deregulated, but not petrol. Second, there is confusion in what government has just recently announced through the office of the Minister of State for Petroleum Resources. Is it removal of subsidy? Is it price hike? Is it deregulation? All of the above? A few weeks ago, we were informed that subsidy had been removed and savings were recorded. And as Labour rightly asked, if the market has now been deregulated, why is government fixing price?
The significance of the unknowns is that they play dangerously into a narrative of confusion that appeared to have characterised the conduct of the petroleum sector since the inception of the new administration.
No doubt there are real challenges, including the inherited near collapse of the oil sector due to falling crude price and foreign exchange crisis, leading marketers to abandon ship and a consequent scarcity of fuel and long frustrating queues at gas stations nationwide. Though Nigerians are long-suffering, Minister Kachikwu appeared to have drained their reserve of patience with his unguarded “I am no magician” remark. He learned a good lesson in the ethics of servant leadership, and forgiving Nigerians moved on.
But the challenge of fuel scarcity persisted and appeared to be worsening with the unstable and unpredictable foreign exchange regime. This has certainly led to the decision of the federal government to deregulate and have private entities import and supply fuel to meet the demand of Nigerians. If the decision is to let the market decide, why is that a problem? We saw the effect of the market decision regarding communication. Why are we apprehensive of the market in the case of oil?
The analogy is not a perfect one. It is commonly believed by Nigerians that oil is our heritage, a common patrimony of sort, a divine endowment that must serve the collective interest of all Nigerians. On the other hand, our mobile devices are privately initiated and the outcome of private investment, deserving to be market-driven in order to reward initiative. What can we really enjoy as the chosen of God with Eden-like provisions if we still pay for oil through the nose?
It is a good question and those citizens who have called out the administration on the matter are in part coming from a mindset that informs the question. The other part of their concern is their interpretation of government action as “insensitive and untimely”, with “unbearable negative consequences” on the masses. The critics are as ideologically opposite as fire and water. And the reactions are a mix of drama and realism.
Dino Melaye, a distinguished Senator, member of the President’s party and loyalist of the Senate President gave his party a seven-day ultimatum to reverse the change or he will mobilise for “the mother of all protests.” Shehu Sani, another distinguished Senator of APC, more concerned about the reaction of the administration to Labour’s threat of strike, accused the government of hypocrisy on the grounds that the party supported Labour once when it protested the removal of subsidy and urged the government to stop its “campaign of calumny and blackmail.” These are harsh words from a party man.
Femi Falana, SAN, a consistent human rights icon, wondered aloud why the need for subsidy removal again within just one month of government announcement that it had removed subsidy and saved $2 billion; had repaired refineries, and pipelines were being put to good use. Beside, Falana argued that increasing fuel price was illegal and unconstitutional because the body legally charged with the regulation of fuel price had not been reconstituted. For him, and for a host of critics, price increase only benefits marketers who also profit from subsidy. The remedy is the full functioning of oil refineries.
The one body that has unswervingly taken on the role of the solicitor and advocate of the masses is the Nigeria Labour Congress (NLC). It is, therefore, no surprise that the organisation was among the first to pick up the fight. But it is also an unpleasant surprise that the labour union has turned out to be a divided house that can’t stand. The first sign of the Tower of Babel scenario was the approval of the increase in oil price by NUPENG and PENGASSAN, two oil sector union members of NLC. Then, of course, the administration deftly exploited the internal crisis within NLC that resulted in its division into two factions. And that appeared enough to kill the proposed strike, leading major media houses to declare the NLC strike proposal as “dead on arrival.”
Should the strike fail, there is no doubt that it will permanently damage the reputation of NLC and it will hopefully learn a great lesson in organisational solidarity.
Yet, while government may thus have its way, it also must pay attention to relevant lessons from its actions and policies. First, a progressive party and the government that it leads must treat Labour with respect and courtesy. Labour is the foremost ally of any progressive administration because both are for the masses and the downtrodden. Therefore, they should be partners. It is not expected that every policy of a progressive government will be acceptable to Labour. Nonetheless, mutual respect demands that government dialogues with Labour before the implementation of policies that may affect its members.
Second, even if it serves a short term interest of government, it is not in its long term interest to alienate Labour or exploit any internal conflicts within its fold. Third, government must not give room for accusations of flip-flopping in policy decisions. The way that the fuel crisis was handled, especially since the beginning of this calendar year, leaves much to be desired. Transparency is the hallmark of a progressive government, which has nothing to hide from its citizens. Therefore, it is important that government levels with the people all the way, no matter what the situation. Claiming to have removed subsidy almost a month before it was actually removed is, to say the least, rather strange.
Fourth, while the removal of subsidy may not have been avoidable, its timing could have been more smartly planned. Many thoughtful observers have wondered why government did not tarry a bit, release some budget allocations, especially those targeting the poor, and allow the impact to be felt by them before implementing the full weight of subsidy removal. Hindsight, they say, is always 20/20. But now, even after the fact, it is still important that the budgetary palliatives be implemented effectively and monitored efficiently so that the negative effect of fuel price increase does not suppress the positive impact of the palliatives.
Finally, the faction of the labour union that is in accord with government must have something to show for its “reasonableness” and/or “loyalty” to the “national interest.” Surely, government cannot now reverse itself on subsidy removal. But Labour has proposed a review of the minimum wage, and while government will be hard put to support a minimum wage of N90, 000 or even N56, 000 in the present state of the economy, it cannot deny Labour the right to negotiate on this matter. Fortunately, Comrade Governor Oshiomhole has a track record of successful negotiations.
NATION
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