Killing The Monster Of Petrol Subsidy In Nigeria

If there is anything the latest Home of Representatives public hearing on the petroleum products subsidy established firmly, it is the fact that abuses within the importation and cost of those merchandise have been happening for a number of years.

The truth that the abuses have been happening for years mustn’t surprise anybody. Earlier than the restoration of democratic government in 1999, for example, Nigerians had been subjected to years of not just long queues at petrol stations but also imported inferior petroleum merchandise. The off-specification gas broken car engines and likewise affected the health of our folks, with a number of those afflicted by respiratory problems like asthma and bronchitis reported lifeless; medical experts speculate that the inferior petrol, which had an offensive scent, could cause most cancers.

The abuses within the importation of the petroleum merchandise have been such that the then Group Managing Director of the Nigerian National Petroleum Corporation, Bayero Dalhatu, needed to publicly state that there was a large scale importation of petroleum merchandise without the NNPC being aware of it, not to mention being the supply. Dalhatu, an engineer, argued that there was no way the NNPC, an expert and responsible organisation, may have allowed the importation of harmful products into the nation.

It was later discovered that the off-spec product was brought into Nigeria by a politically nicely related household. The family was, in fact, importing all of the petroleum merchandise. Due to the massive demand – given the country’s inhabitants of 130 million then, this household could not cope. The result was perennial scarcity of gasoline, which gave rise to long and countless queues at petrol stations, as well as arbitrary price will increase in most elements of the nation.

Analysts consider that the fortune, which this family was making from fuel importation accounts for the federal government’s failure to carry out a proper Turn Round Upkeep (TAM) in the 1990s in each of the nation’s four refineries situated in Port Harcourt, Warri and Kaduna. The contract for the Outdated Port Refinery, with a capacity to refine 60,000 barrels of crude oil per day and the brand new Port Harcourt Refinery, with a capacity to refine 150,000 barrels of crude oil per day – was given to a 3rd rate European firm. The opposite TAM contracts were also awarded to inexperienced companies, both local and international.

It is necessary to restate these current details about the management of the downstream sector of the Nigerian petroleum business as a result of unexpectedly the impression is being created in some quarters that the problems, which the Nigerian public has witnessed in the importation and payment of petroleum products in Nigeria are a brand new creation. The impression is completely misleading.

The problems of fuel subsidy are usually not new. They existed long before President Goodluck Jonathan came to energy. In truth, the Petroleum Merchandise Pricing and Regulatory Agency (PPPRA) was created by the Chief Olusegun Obasanjo administration as a part of a critical effort to resolve this lengthy standing problem. But instead of PPPRA being the solution, it is a pity that the PPPRA itself was to become considered one of the problems. Even the late President Umaru Yar’Adua was another chief who grappled with the issue of subsidy abuses without success.

A lot as the government resolution to finish the cost of fuel subsidy on January 1, 2012, might not be very talked-about due to the timing and the economic hardship facing our individuals, President Goodluck Jonathan should be commended for not just uncanny courage but also for his sincerity of function, because he looked back, saw that his predecessors had been unable to cease the subsidy abuses and, rightly or wrongly, he took the bold resolution to finish the rot as soon as and for all.

As regards sincerity of function, another key government official who deserves commendation is the Minister of Petroleum Assets, Mrs. Diezani Alison-Madueke. Most petroleum ministers we have seen on this nation haven’t been fascinated by petroleum subsidy removal simply because of their personal benefits. They have over the years used gasoline importation to empower and reward social gathering loyalists, relations and mates, which profoundly hurts Nigerian residents. In different words, it is not in the private interest of a petroleum minister to take away fuel subsidy. For daring to be totally different Mrs. Alison-Madueke deserves kudos.

Looking back over Alison-Madueke’s tenure as minister, it is easy to see a constant pattern of making an attempt to resolve this downside. Even before the difficulty of subsidy removing came up, the minister insisted on getting the unique builders of Nigeria’s 4 refineries to carry out the Turn Round Maintenance. The explanation for choosing the unique builders is to end the observe where the refineries fail to work even after TAM has simply been done due to the low calibre of the contractors. The original builders of the refineries are world class engineering corporations. Subsequently, they’ve a repute to guard.

By the point the TAM is concluded inside one 12 months, even when there aren’t sufficient petroleum merchandise for native consumption from the 4 refineries, which collectively have the capacity to refine 445,000 barrels of crude oil per day, the demand for imported fuel will reduce drastically. This improvement may have an instantaneous salutary impact on the country’s expenditure on gas subsidy and on our international trade reserve, as well as on employment and enterprise opportunities for the Nigerian individuals.

In response to the problems that had been brewing in PPPRA, Mrs. Alison-Madueke inaugurated last November a brand new group at the PPPRA with the mandate to wash up the mess. Since then the new PPPRA management has taken some vital steps to sanitise the importation and cost of gas and their efforts have been extremely commended by trade watchers.

Not even essentially 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 challenge of importing and paying for fuel in Nigeria, which has been draining Nigeria’s nationwide treasury for effectively over 10 years. If only previous government officials had displayed such commitment 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 again demonstrated the advantage of placing nationwide service above parochial and private curiosity. We’re impressed.

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