Front Page Comment: Buhari, Kachikwu, APC And Subsidyspeak

Critics of the All Progressives Congress’ (APC) campaign strategies in the 2015 General Elections often claim that the sole aim of the then opposition coalition, now the governing party, was to befuddle Nigerians, especially voters. These APC knockers also insist that although the ruling party promised “Change,” it has no intention of changing its public communication objective in government, hence Nigerians should expect to be stupefied, more than ever before, by the APC apparatchiks in government for the next four years.
The Orwellian Doublespeak on the on-going fuel scarcity, petrol price and subsidy removal or retention emanating from the APC-led government all the way to the very top is stupefying, to say the least, and appears to lend credence to claims that the nation is in the hands of Goebbelsian prodigies.
During his courtesy call on Daily Trust on Wednesday December 2 to thank that newspaper for “the sacrifice you made helped to bring about the change that Nigerians desired,” Minister of Information and Culture, Lai Muhammed, told the nation: “We can confidently announce here today that the scarcity will end in a few days. Subsidy payment till the end of the year has been approved by the National Assembly…We can assure you that we won’t be caught in this kind of situation again.”
It is Christmas. The fuel scarcity is still here with us, and worse than when the government’s chief spokesman gave his words on change.
The correct pump price of petrol, subsidy’s existence, payment, removal or retention are at the heart of the current scarcity of fuel in the country. In answer to whether the government will remove petrol subsidy in the 2016 budget. Minister of State, Ibe Kachikwu, reportedly said:
“The total subsidy figure for 2015 when taken along with NNPC will be in excess of N1 trillion. We can get the specifics but the point is largely that it does not involve NNPC because the agency takes its off-cuff. We will work towards taking those figures off our budget in 2016.”
“The government doesn’t need to fund subsidy. There is energy around the removal of subsidy. Most Nigerians we talk to today would say, that’s where to go…I have since left the dictionary of subsidy by going to price modulation, which is a bit more technical. Price of refined products today is N87. It was N97 before it was removed and we really have to go back to that because we don’t really have the finance to remove it.
“There are lots of safety barometer between the N87 and N97 per litre regime between which government does not have to fund subsidy…Yet the prices would be fairly close to what it used to be today. That is the first mechanism we are going to work on. It is when that mechanism fails that we will begin to look at a total subsidy exit. We believe we could achieve that.”
How about that for an Orwellian Doublespeak, to the simple question: is subsidy on or off government books in 2016?
In a sudden slither back to the same stand he opposed and helped to organise a nationwide revolt against in January 2012, former Lagos State Governor and National Leader of the APC, Asiwaju Bola Ahmed Tinubu, has this to say about subsidy in Kaduna a few days ago:
“In a perfect world, I wish we could sanitise the subsidy regime and thus continue (with) it. However, I have reached the conclusion that there are too many demons in the system for this hell to be converted into good earth let alone heaven. I would choose to remove the subsidy and use the money to help people… I am one of those enjoying or benefitting from the cheap pump price per litre, but I don’t need it…Let us begin a process of a thoughtful but decisive subsidy phase-out.”
And in his budget speech before the National Assembly last Tuesday, President Muhammadu Buhari said he had “directed the Petroleum Products Pricing Regulatory Agency (PPPRA) to adjust its pricing template to reflect competitive and market driven components. We believe this can lower input costs and attain efficiency savings that will enable PPPRA to keep the selling price for all marketers of petrol at N87 per liter for now.”
The President added: “The current fuel scarcity with long queues at petrol stations all over the country causing social dislocation is very unfortunate. Government profoundly apologizes to Nigerians for this prolonged hardship and misery. It is as a result of market speculators and resistance to change by some stakeholders. Government is working very hard to end these shortages and bring fuel to the pumps all over the country.
Given that the President, as Candidate Buhari, had expressed doubt about subsidy payments, what do we make of his latest comment on this burning national issue? Crude oil is now selling well lower than the mark it was when the last government moved petrol price from N97 to N87, If PPPRA adjusts its pricing template “ to reflect competitive and market-driven components, how could petrol still continue to sell for N87 “for now.” Will that price be with or without subsidy?”
In summary, President Buhari, and Minister for Petroleum, said petrol will “continue to sell for N87 for now.” Kachikwu said “Price of refined products today is N87. It was N97 before it was removed and we really have to go back to that because we don’t really have the finance to remove it. Tinubu said, “let us begin a process of a thoughtful but decisive subsidy phase-out.”
Any Nigerian should be pardoned if he takes all all of these coming from those who should know in the government as giddy Orwellian Subsidyspeaks. There are so many questions on this issue begging for answers, but to which no official in the Buhari Administration has provided clear, straightforward response.
How much does the government want to sell petrol to Nigerians in 2016? Will subsidy be on or off petrol in 2016? Amid the glut on the market and tumbling price of Crude oil today, how valid is the argument that there is any subsidy on petrol in this country? At this record low cost of crude, why is petrol not selling lower than N87 in this country? How could a product supply and price under the firm control of the government agencies suddenly slip into the hands of “market speculators” as the President wants us to believe? Who are does “stakeholders” putting up this strong “resistance to change” as to overwhelm the Federal Government of Nigeria under President Buhari to afflict the country with “fuel scarcity with long queues at petrol stations all over the country causing social dislocation”?
However, clearing government’s cobwebs spurn around petrol subsidy and the two-month-old scarcity of this economic life juice is not hard to figure out. We are of the view that following years of calcified denial of the existence of subsidy, opposition to its payment and disputations over its figures, albeit in a position of deep ignorance outside government, the seven-month-old administration of President has been hit with the realities of subsidy payments.
One of these realities is that the subsidy regime is firmly in the grips of a nouveau riche class created by the Peoples Democratic Party (PDP) in the last 16 years, some would argue, as a veritable drain pipe on the Federation Accounts designed to enrich those in government and empower their cronies or proxies for various ends, including providing slush funds for campaign funds.
With the crushing defeat of the PDP earlier in the year, the new APC-led administration has suddenly found itself in bind with the petrol supply system controlled by PDP stalwarts. To continue the subsidy regime it inherited is impossible for this would mean allowing that drainpipe to flow on, and into the pockets of APC’s political adversaries, effectively funding the ‘enemy’ to take on the APC in future elections.
It is unnatural for humans to give up advantageous positions, and so it is in this subsidy imbroglio. Perhaps therefore, the PDP-made subsidy sharks are the “market speculators” and “some stakeholders” putting up a strong “resistance to change” as President Buhari stated in his budget speech.
If this premise is correct – and there are strong undercurrents in the body-politic to support it – The current fuel scarcity is a proxy political war going on between the victorious APC and elements of the PDP holding out and pressing the advantage they enjoyed under the defeated regime. The most effective approach for the subsidy beneficiaries to strengthen their hands in the on-going confrontation would be to cut back on supplies or stop fuel importation totally, and insist on being paid on outstanding claims, bogus or not. This dogfight has stalked President Buhari since he came on board, creating “fuel scarcity with long queues at petrol stations all over the country causing social dislocation.”
For existential reasons, however, the APC must wrestle the subsidy regime out of the current beneficiaries’ control and replace the PDP-chosen fuel importers with the APC’s hand-picked substitutes. The requisite process to achieve this imperative is complex and needs time. Both parties to the standoff know it. Unfortunately, the country and its citizens are the grasses on which this elephantine combat is currently being fought.
Against the backdrop of sinking crude prices, we are of the view that an argument for the existence of subsidy on petrol in Nigeria today flies at the face of reasons, especially “competitive and market-driven components” of the crude oil business. It is pure sophistry.
Phoney as the subsidy regime is today, however, let no one be under any illusions that the Buhari Administration will announce its total removal. The oil subsidy-loving hawks in government will see to that. At whatever price petrol sells in 2016, government will claim that the product is still being subsidised. This would give a leeway to the APC-led Federal Government to create its own class of nouveau riche out of party faithful – many of whom are already impatiently grumbling to be compensated for their roles in the party’s 2015 victory – to import subsidised fuel, even if all refineries in the country, by some miracle, start to function at optimal level!
It appears to us, therefore, that be it PDP or APC, Transformation or Change, the petrol subsidy bogey is here to stay for a long time. This is because it provides jobs for the boys and party chieftains; they are the “too many demons in the system for this hell to be converted into good earth let alone heaven.” And of course there are elections to win, even before 2019… Only Providence can save Nigeria from the subsidy scam!