Advocacy for the Removal of Fuel Subsidy

In series one of our clarion call for urgent and immediate removal of the criminal and fraud laden petroleum subsidies schemes, unbundling of the NNPC and privatization of the refineries, we listed ways and means, through which a tiny band of conscienceless and greedy men at the Petroleum Ministry, NNPC and their collaborators have wasted, squandered and misappropriated humongous amounts of funds that would have been paid into the Federation account for the good of 198million Nigerians.

These means and ways include:

1. Over $12billion /N3.67trillion that was misappropriated through criminal/fraudulent spike in the daily PMS consumption in Nigeria from a range of 28m-39m litres a day prior to 2015 to a new range of 56m-70m ghost PMS import/consumption under Buhari/ Baru watch. This N3.67trillion that did not enter our Federation account is the differential between actual consumption /import volume and the ghost import /consumption /smuggling.

2. Over N3.9trillion that should have gone into the Federation accounts were squandered and wasted by way of Petroleum subsidies, PEF and all other sundry consumption subsidies in the downstream oil and gas industry from 2016-2019.

3. Over $389million/N140billion that would have gone into the Federation accounts was wasted in useless turn around maintenance program of obsolete refineries that should have long been privatized and farmed out.

4. Over N550billion losses reported by NNPC from maintaining the obsolete refineries and running the opaque house of sleaze in Abuja.

This huge leakages, waste and misappropriated funds of almost N8.2trillion under 3 years, would have easily been used to create value for Nigerians and put in place sustainable palliative measures that would have cushioned the temporary and short term shocks that may be occasioned by the total deregulation of the downstream oil and gas sector and unbundling of the NNPC.

If this squandered N8.2trillion was paid into the Federation account, my Imo state would have received between N80billion to N100bn as additional revenue from the Federation account byways of JAAC and FAAC.

What a truly honest, creative and progressive governor of Imo state would have done with such excess subsidies removal induced revenue to ameliorate the hardship of the populace includes:

1. Go into PPP arrangement with a reputable transport operator, using the Imo Transport Corporation brand to purchase 540 units of brand new 18 seater buses at a cost of not more than N7billion lease financing. Also, acquire 100 units of long haul wide body buses at not more than N2.17billion and 100 units of haulage trucks at not more than N2billion.

2. The cost of maintaining these 700 vehicles will not be more than N800million per annum. The cost of fueling them per annum even if the pump price of the PMS jumps up to N250/liter after removal of subsidies will not be more than N5.1billion.

Add up this amount and you will get N17billion. This is by far less than the N80bn-N100billion that would have come/accrued to Imo state over the last 3 years (2016-2019) had we proactively and progressively removed these criminal subsidies, privatized the refineries, unbundle the NNPC and eliminated this ghost PMS import/consumptions volume of 60m litres per day.

These buses shall be deployed under such a metered/digital arrangement that will make qualifying Imolites enjoy public transport services at fares that is even slightly less than what they are paying now.

N80bn-N100billion less the N17billion that would have been invested in this palliative public transport services that are fully paid for by government for the first one year post subsidies removal, will still leave the Imo state governor with over N63- N83billion to invest in other sectors that will grow the Imo economy and put many Imolites into productive works.

Of a truth, the other 35 states in Nigeria are actually subsidizing economic activities and consumption in Lagos state, since residents and taxpayers in Lagos state consume over 60% of the actual average PMS consumption volume of 28-35million litres a day.

On the other hand, Lagos state and the other 35 states in Nigeria are actually subsidising the fraud, ghost consumption, greed and inefficiencies of the cabal at the NNPC, their collaborators and the smugglers.

When you hear the Minister of Finance, Zainab Ahmed state that they are consulting with stakeholders before removing this corruption infested subsidies regime, privatization of the refineries and unbundling of the NNPC, kindly note that she is talking about the cartel that has held the rest of 198m Nigerians to ransom. They do not have one jot of love or care for the masses. It is almost too difficult for them to let go these criminal enterprises and source of slush funds called the subsidies/NNPC.

It is either Nigerians rise up to demand that the right things be done now and immediately without further delay, or we will continue to be at the mercy of few men, who daily loot billions, while the economy haemorrhages.

Kindly note that while the global oil giants, who drill our crude oil like Chevron, Royal Dutch Shell, British Petroleum etc continue to build and operate mega refineries in South Africa and Angola, where their oil and gas sector is transparently run without opacity, they will never set up one in Nigeria, because they know the economic wrecking, enterprise distorting , and business destroying antics of those who rule us.

We must totally deregulate, and eliminate the criminal duplicity in our national oil and gas regulation/administration and allow transparent, honest and market-determined pricing mechanisms in our oil and gas industry, before they will take us seriously. I am sure someone will read this and say… oh, let’s wait till Dangote completes his refinery project. Kindly note that you will have to wait till 2023/24 to have it fully operational. He is part of the system. Stop hoping against hopes.

Dr Nnaemeka Onyeka Obiaraeri, FICA, MIRA

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