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Saturday, May 25, 2024

13 Things About The Fuel Subsidy Removal That Makes It Immoral [MUST READ]

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by Farooq Kperogi

Further thoughts on the immorality of the petrol subsidy removal:

1. Oil is the engine of the Nigerian economy in ways it is not elsewhere. When the price of petrol goes up in Nigeria, everything else goes up—except the already measly salaries of everyday people. This is not the case in many countries. So you can’t just arbitrarily jerk up petrol prices and ignore its other unsettling effects on other facets of the society.

2. A way bigger waste than the “waste” of petrol subsidy is the humongous amounts we expend monthly to subsidize the obscene opulence that Nigeria’s political elite—from the president down to a councilor—luxuriate in. Nigerian political elite are the most remunerated elites in the world. They even earn more perks than their American counterparts. But no one is talking about this subsidy. Only the comparatively miserly “subsidy” that makes life just a little easier for the common people is subject to scrutiny.

3. The flyblown canard about why the fraud in the oil subsidy regime justifies its discontinuance is disingenuous. It’s government’s responsibility to catch and stop the fraud. If it can’t fix something as basic as fuel subsidy fraud with all the powers and resources at its disposal, the government has no reason to exist. It has no business being in the business of governance. It is conscienceless to transfer the burden of government’s incompetence to the masses who are already reeling under the weight of an unbearably crushing existential misery.

4. Every responsible government in the world subsidizes the products its citizens use to survive. State governments in America collectively spend $10 billion to subsidize the fuel consumption of their citizens. (Read my column tomorrow for details). The American government also spends $20 billion every year to subsidize agriculture in what is called “farm income stabilization.” That’s why food is dirt cheap here. And we are talking of the world’s wealthiest country. If anyone tells you America doesn’t subsidize the fuel consumption of its citizens, stare him straight in the face and call him a fraud without blinking!

5. Subsidy isn’t just a moral imperative; it’s also an existential imperative. If people are left to grapple with the smoldering violence of unchecked capitalism, they will either die off (if they are stupid and docile) or revolt against the source of their misery (if they are smart and active). There is no middle ground.

6. With the latest increase, a gallon of petrol is now about $3 in Nigeria. In the states of Oklahoma, Missouri, Kansas, Texas, Louisiana, and Mississippi, a gallon (i.e. 4 litres) of petrol is less than $2. In Georgia, where I live, it is a little above $2. (It was actually less than $2 until a few weeks ago). In California, the state with the highest petrol price in the US, it is $2.7. Why should Nigerians pay $3 for a gallon of petrol at a time of a global slump in the price of petrol—and when they are at their most vulnerable state in all indices of life? This makes neither moral nor logical sense at all.

7. Let’s look at other oil-producing countries. In Saudi Arabia a gallon of petrol goes for $0.64. In Venezuela it is $0.38. In Russia it is $0.63. In Algeria, Angola, Ecuador, Iran, Iraq, and Kuwait, it costs less than $1. In Qatar it is $1.26. In the United Arab Emirates it is $1.77. In Canada it is $2.

8. Now, look at this: the minimum wage in Algeria is $170 per month; in Venezuela it is $89 per month; in Saudi Arabia it is $720 per month; in Angola it is $90.53 per month; in Russia it is $95 per month; in Ecuador, it is $427 per month; In Iran it is $215; in Iraq it is $214 per month; In Kuwait it is $3,650 per month, and their Congress has proposed to raise it to $5,300 per month; etc. Qatar and UAE have no official minimum wage but they live really well.

9. Nigeria’s minimum monthly wage is $90 and the government wants the masses to pay $3 for a gallon of petrol. That is the highest in OPEC countries, which have vastly higher minimum wages and standards of living than Nigeria. That’s a vicious rape. There’s no way to sugarcoat it.

10. If Nigerians choose to accept this with listless abandon, it’s their choice. I am not directly affected by this. Forgive the immodesty, but I have the means to increase the monthly allowances of my parents in response to the hyperinflationary conflagration that is sure to follow in the aftermath of this cruelly insensate punishment of the masses. But what about the millions of people who have no alternative, who live on less than $1 a day, who literally vegetate on the very edge of existence?

11. Since 1970 when Gowon increased the pump price of petrol from 6 kobo to 8.45 kobo, subsequent Nigerian governments have always insisted that subsidies are unsustainable and must be removed for the “benefit” of the people. Just when you think they have finally removed the subsidies and would spare the masses the emotional blackmail, they tell us again that they need to remove what they had told us they removed. So brace up for another regime of fuel price hikes in the coming years, maybe months, in the name of “deregulation,” “subsidy removal” or suchlike inane mumbo jumbo. It will never end.

12. Why aren’t we having a conversation about government’s unwillingness or inability to build and maintain functional refineries, which will obviate the need for fuel importation and the so-called subsidy?

13. I frankly don’t see the benefit in being an oil-producing country if the money that accrues to us from oil merely subsidizes the epicurean pleasures of the elite while the poor are metaphorically forced to hold cream on their hands while their faces are dry. I would be at peace if we pay high prices for petrol because we don’t have it.

Farooq Kperogi is a columnist with Weekly Trust, where this article was first published.

The opinions expressed in this article are solely those of the author.

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