The earlier the subsidy is removed, the better for all

Despite a controversial budget of N3.4 trillion to fund fuel subsidy in the first half of this year, a resurgence of fuel queues in major cities across the country has exposed the mess in the sector. There is need to demand accountability. From Lagos to Abuja, Enugu and Maiduguri, Nigerians now spend hours on queues and when they eventually get the fuel, they pay outrageous prices for what is supposed to have been fully subsidized. While in the past there were usually stories from the managers of the sector, none is provided this time around as officials pretend as if everything is normal in a sector that exemplifies the failure of Nigeria. 

More concerning is that fuel prices seem to have been deregulated at the pump by the marketers who are selling at different prices. Yet, the regime of subsidy remains. That Nigerians are paying more for the fuel they have suffered to get demands explanation. While those that should be held to account are silent, the Major Oil Marketers Association of Nigeria (MOMAN) has expressed “sympathy” with Nigerians over the challenges at filling stations across the country. “These queues are caused by exceptionally high demand and bottlenecks in the fuel distribution chain. The major cause is the shortage and high (US Dollar) costs of daughter vessels for ferrying products from mother vessels to depots along the coast. Next is the inadequate number of trucks to meet the demand to deliver products from depots to filling stations nationwide,” according to a statement from MOMAN. “These high logistics and exchange rate costs continue to put pressure on prices at the pump.” 

Nigerians have lost count of the number of excuses that have been provided by different actors to rationalise why in major cities across the country queues of motorists stretch kilometres at fuel stations, with the attendant traffic snarls slowing down commercial and social activities. As the problem persists, numerous productive hours are being lost while people’s savings are getting ruthlessly depleted. And as Nigerians groan daily at filling stations, the stark irony of our predicament is that citizens of the seventh largest producer of oil cannot fuel their vehicles. It is as confusing as it is frustrating. Yet, resolving the logjam is not a mystery. 

   The question that remains unanswered is whether Nigerians would ever see an end to this perennial scarcity that has come to define the management of the downstream sector of the petroleum industry. For years, the falling price of crude was the “saving grace”. But the country is now badly exposed at a time of high crude price occasioned by the current war between Ukraine and Russia.     

     Meanwhile, the refineries have continued to fail in terms of satisfying the essence of their establishment, given that the importation of petroleum products has become a major and running routine in the economic management of the country. The reason, as often adduced by the industry experts, is that the refineries have either all broken down due to poor maintenance culture or that the installed production capacity cannot meet the ever-growing local demand for petroleum products. Yet, hundreds of billions of naira are pumped into them every year.   

While it makes no sense that Nigeria continues to import finished petroleum products at huge cost to the economy, experience has also shown that the government is not adept in the efficient management of businesses. If anything, the tales of corruption, ineptitude, sabotage and other sharp practices in the oil and gas industry have continued to confirm this widely held opinion. With the presidential election slated for next month, the hope of most Nigerians is that whoever wins would have the courage to resolve this nagging issue of subsidy that is at the heart of the perennial fuel scarcity.  

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