Editorial: Subsidy, Oil Marketers And Nigeria’s Future

As we approach the May 29 hand-over date, the ghost of fuel scarcity, which many thought had been slayed for good, has apparently been resurrected by, on the one hand the obvious cash-flow problem the country has now found itself, and a fervent desire to receive all outstanding subsidy payments from the out-going federal administration on the part of the oil marketers.
According to the Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, the Federal Government paid N305 billion and N31 billion in foreign exchange differentials to oil marketers in December 2014 under the subsidy scheme. Only last Thursday, the oil marketers also received N156 billion in subsidy payment. There remains in contention still over N100 billion as subsidy payment.
Given that the subsidy regime dates as far back as 1999, the country has obviously spent trillions of naira on this policy in the last 16 years. Many have reasonably asked: How much does a refinery really cost as to make importing petrol more economic than building more in the country? Evidently, however, the oil subsidy regime has been a veritable hunting ground for corrupt officials and their collaborators in and out of the oil sector to fleece the country of a considerable chunk of sorely needed funds. There, we surmise, lies the staying power of subsidy.
Truth be told, the subsidy scheme is now an albatross. It proponents say the masses of this country benefit from it and so it must continue. Opponents, however, contend that the subsidy system has turned to a cesspool of corruption and a drain on national resources. We submit that they are both right.
Be as it may, however, we contend that the oil subsidy regime as currently operated is due for a complete radical overhaul, if this country does not want to meet its waterloo through the scheme. In current reality, the humongous amounts consumed under the subsidy scheme is simply unsustainable. To remove the subsidy in totality as some have also argued is also capable of throwing the country into an unprecedented socio-economic upheaval, especially if the prices of goods and services take a cue from the expected rise in cost of fuel and follow suit. Is the country ready for such turmoil? We don’t think so.
The solution to this quagmire lies in the pre-subsidy history of this country and it is not rocket science. Before the Federal Government dreamt up the oil subsidy regime, local consumption was met by the government refineries in operation right here in this country. Nigeria is the only oil-producing country in world which exports its Crude for refinement abroad and imports petroleum products. We must rediscover our sense of shame over this absurdity and put an immediate end to fuel importation by making our refineries work again.
This, we submit, must be one of the very first changes the incoming government of Gen. Muhammadu Buhari should see to, if Nigeria is to get back on track again.