Caveat Emptor: Ripples believes in the Buhari Presidency; and feels structural pains are inevitable to wean us from the degeneracy of the Obasanjo-Jonathan Peoples Democratic Party (PDP) era.
So, this is no “wailing wailer”, bleating uncouth and bad-tempered blues.
Still, it is hard to gulp down the stiff increase of the pump price of petrol, from N86.50 to N145 a litre, despite the grim economics that has made it inevitable.
It is fruitless arguing with the grim numbers, particularly coming from Vice President Yemi Osinbajo.
Sure, neither Mr. Osinbajo, nor his principal, President Muhammadu Buhari, is an economist, as their opposers would trumpet with glee. Still, it is arguable if any pair, at the helm the Nigerian state, ever boasted a higher personal credibility rating.
That high integrity quotient would appear to have helped to deflect part of the anger, and the sense of betrayal, not a few feel, with the hike.
Still, neither the harsh numbers nor ode to integrity could take away the pains. Just too many are hurting, simply because the pocket has simply vanished, under terrible economic blizzards!
The starkness of the vice president’s jeremiad-by-numbers leaves everyone numb; even number by a combined presidential earnestness, never before marshalled in this land.
The Nigerian National Petroleum Corporation (NNPC) could supply no more than a half of local petrol consumption. The Central Bank of Nigeria (CBN) doesn’t have the forex to feed oil marketers to import the balance. In fact, by the Vee-Pee’s figures, CBN must fork out US $225million, from the US $550 million crude oil earnings in April, to do that!
So, something just has to give — the exponential rise in price; and the marketers can source forex from outside CBN, and still cut a deal.
“We expect,” the vice president reasoned, “that foreign exchange will be sourced at an average of about N285 to the Dollar, (current interbank rate) and importers will then be restricted to selling at a price between N135 and N145 per litre.”
But the only hope, from the forlorn economic chambers, is the promise of local refining.
The Vice President wagers: with more private refineries competing with NNPC’s, which capacity, even at optimal production, can only meet two out of every five litres consumed, “our target is that, by fourth quarter of 2018, we should be producing 70 per cent [seven out of every 10 litres] of our fuel needs”.
That sounds heart-warming, especially since the Dangote refinery is expected to come on stream, around that period too.
But that is precisely the point. The stiff hike is as much the removal of the much-ballyhooed “subsidy”, as it a stiff price to pay for President Olusegun Obasanjo’s wrong-headed energy policy of deregulation by importation.
Unfortunately, the hapless people, eternal experimental guinea pigs, not the ever-preening Obasanjo, or the effete Goodluck Jonathan Presidency, under which subsidy corruption careened beyond control, are paying this stiff price.
Well, the Buhari government too pays part of it: branded deceitful, harsh and heartless, for bringing forth further pains on the people; and breaking faith with its pro-people “progressive” credo.
So, if the people thunder, and the defensive government dither, for felt policy incoherence, you should understand the basis.
If a defensive Vice President says it’s no subsidy removal but dire forex arithmetic; Information Minister, Lai Mohammed, says Nigeria is broke; other party chieftains celebrate the “removal of subsidy” and the capitulation of Labour, President Buhari himself maintains a loud silence, while the opposition mocks the Babel of voices around a funeral presidential quiet, it is simply because you don’t slap a child and expect it not to shriek!
So, the shriek in the land is healthy. It is from raw pain — after all, the stiff hike is a thunderous economic slap, from which many would not recover in a hurry!
But the refinery bit nails the point — and points the way to new hope. Vice President Osinbajo reiterates the Buhari government’s commitment to local refining, eyeing no less than 70 per cent by 2018.
That is a radical departure from the Obasanjo-Yar’Adua-Jonathan era, which magic formula was full downstream liberalization by importation. True, these governments gave out licences for so-called Greenfield refineries. But from their body language, you could tell: it was just justifying all righteousness — or, more appropriately, all unrighteousness!
That was tragedy foretold — and the present crash of that mis-policy is clear evidence.
But what if 100 per cent local refining is achieved, the excess is exported, but pump price still stays up? That would be unlikely, for the production mix would have been without the transport cost of imported cargo.
But even with that unlikely possibility, Nigeria would still have been better off. Other things being equal, downstream petrochemical spin-offs would have delivered a far better deal for Nigerians in terms of jobs, a more grounded economy and other opportunities.
See why the Obasanjo-era policy was hare-brained?
But still, the troubling question: who pays for the pains for that policy wrong?
Not the people alone! The present government should bear part of it. That is why the N58.5 a litre jack should have been shared between the government and the people, between now and 2018, when the projected substantial local refining target is attained.
Another subsidy, did you gawk, now that “subsidy” is pure policy heresy? Too bad!
In any case, in a democracy, alternative views in public policy cannot be heresy. Let’s just call it some “parting costs”: to ginger the government to aggressively implement its local refining policy; and to put the people on notice that full deregulation is nigh.
Labour’s self-slaughter, on the altar of a rash strike? The Labour aristocrats (to borrow the mighty tag of Tatalo Aremu, the formidable columnist of The Nation on Sunday) had it coming.
But to celebrate the demise of Labour, just because of the cumulative errors of its leaders, is akin to abandoning the Presidency, simply because Goodluck Jonathan messed up, big time. Dumb!
A vibrant organized Labour is vital to democratic deepening, now that the leading opposition, Peoples Democratic Party (PDP), appears still too dazed to play vibrant opposition, on reason, not hysteria.
But beyond Labour’s gloom or glory, political scientists must worry about high capitalism, that flaunts the death of the compassionate state, as some regnant high philosophy. Beyond corruption, that pretty much explains the demonization of subsidy. It could have grave implication for capitalism and the state as we know it.
If the current pricing regime stays — as it appears it would — it would have been due to the President’s perceived personal integrity, added with the Vice President’s candour; and to the economic structuralists, the prospects of local refining.
It could well mark the president’s last point of fidelity with economically pressured Nigerians.
If Buhari delivers on refineries, he would harvest reverence, bordering on idolatry. But if he fails, his words would mean absolutely nothing to anyone.
It’s a pretty huge gamble with his trademark integrity and honesty — even stiffer than the price hike.
So, see why Buhari must deliver on local refining?
NATION
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