Oil Subsidy Regime As Catalyst For Corruption In Nigeria

(By Linus Aleke)

We need to unbundle the oil and gas sector so that there will be free entry and proper private participation. A situation where it has become except you are given a licence, you cannot import kerosene; except you are given a licence you cannot import any of the refined products. We are encouraging and fueling corruption with such policy and I think and believe that it is wrong and should be stopped.

MORE than one year after the attempted removal of fuel subsidy by the Jonathan Administration and the eventual partial removal, resulting in strong opposition from the critical stakeholders and the Nigerian masses, opinions are still divided on the subject.

  While the labour unions and the civil society groups believe that the government must continue to subsidise petroleum products as a means of assisting the low income earners and at the same time maintaining stability in the price of petrol and the allied products, the government thinks that subsidy is benefiting only a few and not the targeted generality of Nigerians. It should, therefore, be discontinued.

   The government argued that the amount of funds expended yearly on oil subsidy was enough to develop other sectors of the economy which would ripple out in improved standard of living of the generality of our people. The government felt that the subsidy regime was fueling corruption, an opinion reinforced by the Nuhu Ribadu and House of Representative separate probe reports on it.

  One government functionary who is a strong advocate of total removal of the subsidy and a supporter of Petroleum Industry Bill is the chairman Senate Committee on Gas, Senator Nkechi Nwaogu. She spoke passionately to newsmen, appealing to Nigerians to support such, because, as she argued, it was in their best interest.

  In her words, “I want to use this medium to appeal to fellow Nigerians that we must allow subsidy to go, subsidy is money spent unnecessarily going into few pockets at the expense of the generality of Nigerians. Those of them who went on the street to protest have not been satisfactorily briefed or informed. They should sit back and ask themselves the following questions; how many people are receiving this subsidy? Why must we continue to subsidise a refined product such as the DPK, AGO and PMS when we have four refineries that ought to be capable of refining the quantity of these petroleum products consumed locally? That means that there are few people who are benefiting and if it is only few people, why don’t we do away with subsidy so that we can plough back that money into the development of other sectors of the nation’s economy.’’

  She went on: “We can allow investors to come into Nigeria to establish refineries. Have those who were protesting wondered why 17 licensees were issued more than three, four, five years ago and none of them had been able to build the refinery and the four that we have are producing below capacity. We must agree to remove subsidy. Subsidy is not good for us, I am saying this as a Senator, as a Nigerian, as a mother, as a grandmother, and as a wife that subsidy is not good. We must all agree on the total removal of subsidy. Let the unions realise that the subsidy fund does not go into their pockets.

  “We need to unbundle the oil and gas sector so that there will be free entry and proper private participation. A situation where it has become except you are given a licence, you cannot import kerosene; except you are given a licence you cannot import any of the refined products. We are encouraging and fueling corruption with such policy and I think and believe that it is wrong and should be stopped.

   “We should be grateful to God for giving us such abundant resources including gas. I know that as we speak today, Nigeria ranks ninth in terms of oil production in the world. Every year, other countries discover their own mineral resources and it pushes Nigeria rating down. Secondly, we have also been blessed with the population, being the most populous black nation in the world. And a country of over160 million people. The home alone is domestic gas market and it can make Nigeria very rich, help improve the standard of living, improve health care delivery system in the country and it can also reduce the carbon emission within the environment.

  “Can you imagine if all the homes in Nigeria are served with domestic gas, the raw gas, it will make cooking very cheap because Nigerians will be using natural gas? Thirdly, we will also have the opportunity of exporting to other countries. We have not even satisfied the domestic market and that is why I think and still believe in the ability of our country, the leadership of the country and that of the oil and gas sector. Because you know that where there is will, there must be a way. We have the gas, we have the capacity in terms of consumption and we know that we have not served the area in terms of domestic market. The power sector has not been serviced adequately; we know that we are supposed to be having about 40 mega watts of power. We don’t even have 10 per cent of it and we need Nigeria lien gas to power the power plants that we have all over the country. I have great belief that it can be done; I only pray that we should put our priority right.”

  On the delay in the passage of Petroleum Industry Bill, (PIB) Nwaogu blamed it on external influence. Declaring her support for the expeditious passage of the bill, she appealed to her colleagues in the National Assembly to support the speedy passage, arguing, ‘The bill has the capacity to attract the right investors into Nigeria’.

   “Obviously, I am a crusader of expeditious passage of PIB. I believe in PIB because I know a lot of things that it is going to usher into Nigeria’s economy. First and foremost, it is going to up entry into the oil and gas sector and it is going to create wealth and employment for Nigerians. So I am a supporter of the Petroleum Industry Bill. Having said that, we are working on it and I am sure a lot of Nigerians know that we in the National Assembly are experiencing a lot of external influence, those for reasons best known to them do not want this bill to go through. I am appealing to all of us because we have no other country to call our own or to go to other than Nigeria. We need PIB to attract the right investors into Nigeria; we need the PIB to boost our revenue in this country, we need PIB to open up the industry so that we can have creation of wealth and employment. I am a strong supporter of expeditious passage of PIB and of course as a chairperson of one of the arms of the oil and gas, committee chairman on gas to be precise, I know that if we pass the bill it will also help to bring about fresh investments into the oil and gas sector.”

  Well spoken no doubt but when will government officials graduate from beautiful speeches in support or against a national policy to a decisive action that is aimed at addressing whatever problem they are lamenting.

  The questions in need of answers are; what can be done to tackle the identified problems in the foregoing considering the fact that those who were indicted on the account of oil subsidy fraud are still walking the streets freely? And beyond total removal of subsidy, what measures is the government putting in place to ensure that proceeds from the removal will be used to develop other sectors of the nation’s economy as claimed in government postulation?

  Corruption in Nigeria is said to predate this Administration as the late legendary African literary icon, Prof. Chinua Achebe, aptly captured in one of his works entitled, ‘The trouble with Nigeria’ In it he said, “Anybody who can say that corruption has not yet become alarming in Nigeria is either a fool, a crook or else does not live in this country”. Therefore, it is now time to talk about possible solutions to the problem of corruption rather than continual lamentation over it.

  Having said this, it will also interest parliamentarians to know that Nigerians who have given up their collective rights to their elected representatives in the National Assembly in the name of modern democracy will not accept any excuse in the guise of external influence for their inability to discharge their constitutional responsibilities. Nigerians are watching and waiting for the passage of the Petroleum Industry Bill. No excuse will be good enough to convince them on why a bill that holds so much promise to liberalise the oil industry, provide employment for the army of unemployed graduates roaming the streets, among other benefits, will be thwarted. A word, they say, is enough for the wise.

Editor’s Note: 

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