Killing The Monster Of Petrol Subsidy In Nigeria
If there is something the latest House of Representatives public listening to on the petroleum merchandise subsidy established firmly, it is the fact that abuses within the importation and payment of those products have been occurring for several years.
The truth that the abuses have been occurring for years mustn’t shock anybody. Earlier than the restoration of democratic government in 1999, as an illustration, Nigerians were subjected to years of not simply long queues at petrol stations but in addition imported inferior petroleum merchandise. The off-specification fuel damaged car engines and likewise affected the health of our folks, with quite a lot of those troubled by respiratory issues like asthma and bronchitis reported dead; medical experts speculate oil and natural gas isac that the inferior petrol, which had an offensive odor, could trigger most cancers.
The abuses within the importation of the petroleum products had been such that the then Group Managing Director of the Nigerian National Petroleum Company, Bayero Dalhatu, had to publicly state that there was a big scale importation of petroleum products with out the NNPC being conscious of it, let alone being the supply. Dalhatu, an engineer, argued that there was no way the NNPC, knowledgeable and responsible organisation, could have allowed the importation of dangerous merchandise into the country.
It was later found that the off-spec product was brought into Nigeria by a politically nicely connected family. The household was, in reality, importing all the petroleum products. Due to the massive demand – given the country’s inhabitants of 130 million then, this household couldn’t cope. The end result was perennial scarcity of gas, which gave rise to long and limitless queues at petrol stations, as well as arbitrary value increases in most elements of the nation.
Analysts consider that the fortune, which this household was making from fuel importation accounts for the federal government’s failure to carry out a proper Flip Around Maintenance (TAM) in the 1990s in each of the nation’s 4 refineries located in Port Harcourt, Warri and Kaduna. The contract for the Old Port Refinery, with a capability to refine 60,000 barrels of crude oil per day and the brand new Port Harcourt Refinery, with a capability to refine one hundred fifty,000 barrels of crude oil per day – was given to a third price European firm. The opposite TAM contracts were additionally awarded to inexperienced companies, both local and international.
It is necessary to restate these current details in regards to the administration of the downstream sector of the Nigerian petroleum business because hastily the impression is being created in some quarters that the issues, which the Nigerian public has witnessed in the importation and payment of petroleum products in Nigeria are a new creation. The impression is totally misleading.
The problems of fuel subsidy will not be new. They existed lengthy before President Goodluck Jonathan came to energy. The truth is, the Petroleum Merchandise Pricing and Regulatory Company (PPPRA) was created by the Chief Olusegun Obasanjo administration as a part of a critical effort to solve this long standing downside. However as a substitute of PPPRA being the answer, it’s a pity that the PPPRA itself was to develop into one among the problems. Even the late President Umaru Yar’Adua was one other leader who grappled with the problem of subsidy abuses without success.
Much as the government decision to end the payment of fuel subsidy on January 1, 2012, might not be very popular due to the timing and the economic hardship going through our folks, President Goodluck Jonathan must be commended for not just uncanny courage but additionally for his sincerity of objective, as a result of he regarded back, noticed that his predecessors had been unable to stop the subsidy abuses and, rightly or wrongly, he took the daring determination to end the rot as soon as and for all.
As regards sincerity of function, one other key authorities official who deserves commendation is the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke. Most petroleum ministers we’ve got seen on this country have not been all in favour of petroleum subsidy removing merely due to their private benefits. They have over the years used gasoline importation to empower and reward occasion loyalists, family members and associates, which profoundly hurts Nigerian residents. In different words, it’s not in the non-public interest of a petroleum minister to remove fuel subsidy. For daring to be different Mrs. Alison-Madueke deserves kudos.
Wanting back over Alison-Madueke’s tenure as minister, it is easy to see a constant pattern of making an attempt to resolve this drawback. Even earlier than the problem of subsidy elimination came up, the minister insisted on getting the original builders of Nigeria’s four refineries to carry out the Turn Round Maintenance. The reason for selecting the unique builders is to end the observe where the refineries fail to work even after TAM has simply been finished because of the low calibre of the contractors. The unique builders of the refineries are world class engineering companies. Due to this fact, they have a reputation to guard.
By the point the TAM is concluded within one year, even when there are not sufficient petroleum products for native consumption from the 4 refineries, which collectively have the capacity to refine 445,000 barrels of crude oil per day, the demand oil and natural gas isac for imported gasoline will cut back drastically. This development could have a direct salutary impact on the nation’s expenditure on fuel subsidy and on our international alternate reserve, as well as on employment and business opportunities for the Nigerian folks.
In response to the issues that had been brewing in PPPRA, Mrs. Alison-Madueke inaugurated final November a new staff at the PPPRA with the mandate to scrub up the mess. Since then the new PPPRA administration has taken some critical steps to sanitise the importation and fee of gasoline and their efforts have been highly commended by trade watchers.
Not even probably the most dedicated opponent or critic of President Jonathan can fail to acknowledge that his administration has demonstrated spectacular courage and selflessness in tackling the problem of importing and paying for fuel in Nigeria, which has been draining Nigeria’s nationwide treasury for nicely over 10 years. If only earlier authorities officials had displayed such dedication to the frequent good, the petroleum subsidy challenge would have been resolved long ago, or wouldn’t have risen at all. The President Jonathan administration has, once once more demonstrated the advantage of placing national service above parochial and personal curiosity. We’re impressed.