N10 fuel pump reduction: The misconceptions

(By Bidemi Bayode & Seun Joseph)

A simple analogy would debunk the argument that distributors were going to lose money. Distributors get a depot price of N77 per litre and the consumers, in turn, get it for N87 per litre. Distributors gain, industries flourish, transporters get more fuel to run their vehicles, commuters get to their destinations at less cost, and our generators run longer than usual. Where then is the ill?

PRESIDENT Goodluck Jonathan, in his goodwill message to Nigerians on Sunday, 01 January, 2012, established the factors that necessitated the decision of his administration, to initiate the Fuel Subsidy Removal Scheme, a decision which attracted criticisms from various movement groups and acclaimed progressives in the country.

  The subsequent dividends of the scheme, as witnessed by Nigerians, in the geometric growth and development of the economy, through programmes and projects that were initiated through the platform, justified the action of the government and laid all forms of retrogressive confrontations to rest, seeing that the decision was taken at the best time in our nation’s economic history.

  International bodies and economic spectators eventually commended the federal government for the swift rescue of the nation’s economy through the scheme, as the resulting benefit became obvious through the initiation of alternative people-oriented programmes that cut across every state and grassroots in the land.

  Following the assurance of the federal government to periodically review the fuel subsidy scheme and reduce the pump price of Premium Motor Spirit, (otherwise known as petrol) when deemed necessary, the Minister of Petroleum, Mrs. Diezani Allison-Madueke, announced on Sunday, January 18, 2015, that the price had been slashed from N97 per litre to N87 per litre.

  This pump price reduction was conceived as a political motivation, rather than the constructive trend of economic improvement that it portrays, as the opposition party chose to politicise the situation.

  Some Nigerians, too, chose not to broaden their minds to explore the situation in more evaluative perspectives than they have, otherwise no one would have debated the fact that the reduction is more of a blessing than a curse to the nation’s economy.

The monumental misconception

The popular perception of the contemporary society is that politics is a “dirty game.” Much as it is not a concept of politics to share and brandish, the  perception in its practicality in Nigeria administrative system and in most post-independent African states by extension, has proven it to be so. What with character assassination and retrospective condemnation that characterise our political system!

  Why would any sane and well-meaning citizen of a nation, see no good in the decision of the government to make life easier for its people; even going as far as iterating that it could be a political strategy in a bid to score a political point as against the opposition in the general elections?

  While most Nigerians have been politically sedated with the view that the price slash was politically staged, it is reassuring to know that there are still the objective analysts who have commended the development with no ties to any political acknowledgement. Of course, there are fence sitters, predictable in matters of this nature.

  This piece, however, aims at educating those sitting on the fence, and to possibly break their ideological enchantment.

  It is no news that there has been some situation with the price of crude oil which has experienced a downward spiral for a while now. This, coupled with the 60 per cent fall in the international price of oil, is what, from all available facts, prompted this move by the federal government to reduce the pump price of fuel in from N97 to N87 per litre.

  In an interactive session with newsmen, the Chairperson of the Nigeria Social Insurance Trust Fund (NSITF), Dr. (Mrs.) Ngozi Olejeme, debunked the misconceived notion that the government’s decision to slash the price of petrol by N10 was politically motivated.

  She stated that it was predicated on the reality of the international price of oil which has fallen by almost 60 per cent since June 2014. In her own words: “This is not the first time that we have had a fuel price reduction in this country. You will recall that the late President Umaru Yar’Adua reduced the pump price from N75 to N66 which sold at that price for a very long time.

  “That was not politics because he did it in June 2007 and there was no election around the corner. In this particular instance, oil prices crashed and the government and minister of petroleum decided that owing to the lower price of crude oil, there will be a reduction of fuel in Nigeria; it has nothing to do with the election. If the price remains where it is, there is no justification for any increase.”

  It is predictable that any critic can argue that Olejeme is a subjective employee of the federal government and couldn’t possibly have taken a different position from the government’s. However, what are we going to say about perceptive analysts, who believe that although the reduction might be marginal, it should have immediate impact on the cost of transportation, and manufacturing companies which have a substantial component of their input deriving from the use of petrol?

  What the government’s action shows is that the Nigerian economy is price sensitive and as such a reduction is bound to boost major economic activities in the country.

  Chinedu Okoronkwo, the national president of IPMAN, believes that the reduction would go a long way in cushioning the economic challenges of the majority of Nigerians.

  “It was a right decision taken by the Federal Government”, he had said. “It is a fruitful decision. It will go a long way in addressing the agitation of the people but there should be a holistic approach towards passing the Petroleum Industry Bill.

  “The Federal Government has been steering the oil and gas industry in the right direction. This has shown that the government has great concern for the people,” he stated.

  A simple analogy would debunk the argument that distributors were going to lose money. Distributors get a depot price of N77 per litre and the consumers, in turn, get it for N87 per litre. Distributors gain, industries flourish, transporters get more fuel to run their vehicles, commuters get to their destinations at less cost, and our generators run longer than usual. Where then is the ill?

  It is agreed that the reduction is probably coming at a rather later time than expected and the whole mechanism could be modified to provide optimum benefits, but shouldn’t we make do with what is visibly obtainable?

  The fate of any nation is hinged on the socio-political unity that thrives among the people, regardless of varying political inclinations. Every political opposition thrives to convert every identified flaw into opportunity to develop the country. What ought to happen is for all hands to ensure that only the benefits of this scheme are exploited.

• Bidemi and Seun are creative writers in Lagos.

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