FSR and government’s resort to blackmail (I) By Mohammed Haruna  Newsdiaryonline Wed Jan 18,2012

With the strike jointly called for by the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC) over fuel subsidy removal (FSR) at least suspended for now, it seems Government has won the day against the mass demonstration for the restoration of the subsidy, assuming, that is, that it existed in the first place. When the two unions issued a joint statement saying the strike will go on until the old price of 65 Naira per litre is restored, they said “We shall neither surrender nor retreat.” They may not have surrendered completely but they have certainly retreated.  

Even then it should be clearly obvious to all that while Government seems to have won the battle for FSR, it has lost the argument for same. It has done so in spite of the brave efforts of the Minister of Finance, Dr. Ngozi Okonjo-Iweala, and the Governor of the Central Bank of Nigeria, Malam Sanusi Lamido Sanusi.

Before, during and after the well publicized town hall meeting in Lagos on FSR under the umbrella of the Newspaper Proprietors’ Association of Nigeria (NPAN), the two led the war for FSR. As field commanders of the war, Government, they said again and again, can simply not continue to subsidize petrol consumption, certainly not on the scale of last year’s which they said had reached 1.36 trillion Naira by October.

To carry on like that, they said, apparently plausibly, is to mortgage the future of our children, possibly even grandchildren. Problem however, is that, first, when you scratch the surface of their arithmetic, as some oil experts have done, it does not quite add up. This is because, to begin with, their arithmetic is based on the opportunity cost of not selling the 450,000 barrels of crude meant for local refining at the international market, whereas the arithmetic should be based on the cost of bringing it up and transporting it to the refineries since the 450,000 barrels are over and above our OPEC export quota.

Then there is the template used by the Petroleum Products Pricing Regulatory Agency (PPPRA) for fixing the price of petrol at 141 Naira per litre. This template is made of 24 odd elements, with several of them, like the taxes and the demurrage on the item, looking either arbitrary or fishy or both.

Next there is the conflicting figures of our rate of consumption among the four institutions involved in the business, namely, CBN, PPPRA, Nigerian National Petroleum Corporation (NNPC) and Department of Petroleum Resources (DPR).Their figures, as Mr. Peter Esele, the President of TUC, pointed out at the NPAN town hall meeting, have ranged between 30 million litres per day to 40. A margin of error of 10 million litres, as Mr Esele said, is obviously untenable.

 According to the US Energy Information Administration (EIA), America consumed an average of 379.7 million gallons per day or 1.7 billion litres per day of petrol in 2010. Depending on which figure of Nigeria’s consumption you pick, this could mean Nigeria consumes somewhere in the region of 1/43 or 1/57 of what the Americans consume. Either figure looks questionable when you compare our economy’s relatively puny $135 billion Gross Domestic Product (GDP) with America’s mighty 14 trillion, i.e. over 100 times the size of Nigeria’s. This is not to mention the fact that the automobile is central to America’s way of life, which it certainly isn’t in Nigeria.

The questionable plausibility of the oil arithmetic of the FSR protagonists apart, there is the question of how Government came about spending over five times the 250 billion Naira it budgeted for subsidy in its 2011 budget, a provision based on the performance of the year before. The most likely one phrase answer to this question is Government’s totally reckless disregard of the Fiscal Responsibility Law of 2007; a recklessness in pursuit of the presidential ambition of Dr. Goodluck Ebele Johnson. Otherwise it is difficult, if not impossible, to explain how the huge excess crude account he inherited as acting president following the death of his boss, Alhaji Umaru Yar’adua, virtually disappeared and our foreign reserve ran dangerously low in the run-up to last April’s general elections and we even restarted borrowing from abroad in spite of all the promises Government made that we will never do so again after the so-called debt forgiveness from the Paris Club.

Now, if all of these alone do not convince you that Government lost the argument for FSR even before the debate started, surely its apparent complicity in the resort to crude blackmail by leading figures and groups from the president’s South-South geo-political zone so that Government would have its way, should.

Last Sunday’s Thisday’s editorial, “False Alarm by Niger Delta Elders,” captured this fact very well. Commenting on the claim by the president of the Ijaw Youth Council (IYC), Mr. Miabiye Kuromiema in company of the rather voluble Alhaji Asari Dokubo of the Niger Delta Volunteer Force, that some nameless person were planning to assassinate the president along with the National Security Adviser, General Andrew Owoye Azazi, the army chief, Lt-Gen. Azubike Ihejirika and Senate President, Mr. David Mark, the newspaper rightly dismissed the claim as crying wolf where none existed.

It also dismissed the subsequent claim by the South-South Elders led by the Ijaw leader and former Minister of Information, Chief Edwin Clarke, that some vested interests were trying to use the protest over FSR to remove the president from office.

“We find it very worrisome,” said the newspaper, “that senior citizens (most of whom have held senior government positions in recent past) would promote divisive tendencies. We also condemn any attempt to criminalize the genuine protest of Nigerians over the removal of subsidy by the federal government.”

It concluded by saying it is “a great disservice to President Jonathan that some politicians are using his name to further inflame already frayed passions by raising false alarm at this critical stage of our national life.” What the newspaper did not add but should have was that the President has not shown any disapproval of the untoward words and deeds of his compatriots. On the contrary, he seems to be all too pleased with their dangerous alarmist and divisive antics.

The prize for false alarm and divisive tendencies would, however, go, not to Chief Clarke’s group for claiming that some faceless groups want to use the FSR protests to remove the president. It would not even go to Messrs Kuromiama and Dokubo for claiming some people are planning to assassinate Mr. President, et al.  No.

The prize for false alarm and divisive tendencies will go to the latter two along with three others for signing a widely publicized “Open Letter to the Nation (1)” on behalf of the IYC – the sixth person on the document, one Dr. Chris Ekiyor did not sign the document - claiming the protests over the FSR was a plot “to make Nigeria ungovernable for His Excellency, President Goodluck Ebele Jonathan (so as to) portray him as clueless, weak, incompetent and unable to hold Nigeria together.”

Apology

Last week I said President Goodluck Jonathan travelled to South Africa where the ruling African National Congress was celebrating its centenary, with the First Lady, Dame Patience, in tow, while the war over FSR raged. This was a most egregious mistake on my part as neither travelled out of the country at the time. The error is deeply regretted.

Related:

Withdrawal of oil subsidy: why government’s propaganda isn’t working By Mohammed Haruna