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Oma: Of Subsidy & Deregulation

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The recent fuel crisis got the better of most of us. Paying over 200 percent more on transportation is not a nightmare that I ever want to have. Some people were lucky to have fuel that they could use for a little while; but as soon as they ran out, life became almost unbearable. Never in the history of this nation have I received a message from all my banks that they will be shutting down owing to lack of diesel, as they were not even trying to fake it to please their customers. Schools shut down as a lady whose company shared the building with my organisation had her baby at work.when I asked her, she said the creche sent word that they won’t be opening due to the fuel scarcity.

Last Friday, Blogger, OloriSupergal posted a list which I presume to be from Oando, showing the price of fuel at 87 Naira and stations where it can be purchased. You should see the speed at which I reached for my phone trying to call as many as I know to let them know that a petrol messiah was in town. Dad was one of the lucky few that got my message. Now he can understand why I would rather surf the ‘net for news than read the papers.

So what next? Fuel stations are beginning to sell and their prices are beginning to get friendlier. But how long is it before they begin to protest or we face another fuel situation which may be worse than what it already is. Is the Government paying to subsidise the fuel and how willing are they to continue to manage the situation so that we never experience life in the past again.

Subsidising the fuel seems really attractive as we get it at a cheaper rate than what it really should have been. Speaking with a colleague whose mum is associated with the oil industry, she said that should the nation stop paying for subsidy, we could be paying about 120 Naira a litre. This is on the high side, and means that there would be serious hike on all of the products that we use to sustain our daily existence including food. So, maybe we should just stick to the subsidy while the Government begins to think of ways to raise the money that they need to fulfill the promises that they made on the oil sector including fixing our refineries and building new ones.

As it is, the refineries don’t look to me like they serve their purposes. What Government needs to do, asides striving to fix the old ones and make them running and functional, is to start thinking of possible sites to locate more refineries that will serve the entire nation. However, let’s start from somewhere and with getting the old ones renovated. We will solve a little bit of our problems while we await the drastic turn around that we voted for.

But I paused to think when one man said to me, ‘let the Government deregulate’. Hmmm! Are Nigerians ready to hear his voice of reason? Well, maybe not but I was interested and so, I listened. According to this man who I choose to refer to as Mr. Ladi, should the Government deregulate and keep their promise to rebuild the refineries that are presently down, Nigerians may be willing to take the heat for a period of 6 months when the refineries will be up and running. Therefore making us to believe that the money which should have been paid for subsidy is being utilised efficiently to make life more bearable for our future. And by the future, he means 6 months!

What then becomes of the ‘labourers’ who are most likely to be affected by this developmental discomfort? They need to commute to work and maintain their standard of living which will deteriorate since they now need to pay higher transport fares, pay more to feed their families and who knows? Maybe even the schools will increase the fees to suit the change. What then becomes their fate and how does the Government intend to ensure that they do not suffer so much in a bid to create a better future? The present matters as much as the future.

And here is my submission from that line of thought. Should the Government choose to deregulate, the National Labour congress should ensure that all of these come as part of the deal to deregulate;

1. Let the Government make companies or provide companies with adequate staff buses. I already did a bit of research and I know a bit of what people are thinking. A certain bank scrapped the idea because they were not willing to keep paying transport allowances, which the staff did not agree to. Another bank is doing it and it is working so well and in my opinion, saves me the stress. If I had a staff bus, all I need to do is be there when the bus ought to pick me up, be comfortable and take a good ride to work and back not worrying about jumping public buses, getting rumpled before I get to work and the burden of transport fares is taken off my back. The roads get decongested with less vehicles on the road except for those who just really want to show off or, spend their allowances on petrol. And a few that need to be some place other than home after work. This is on the presumption that the companies do not in anyway reduce the present renumeration of staff.

2. Make sure that the refineries are up and running in 6 months, while plans are being made to build more refineries. As the old ones get better, the fuel prices must also go down and the more refineries we build, the lower the pump prices. This ultimatum must be adhered to by the Government to ensure that we do not have abandoned projects. If after 6 months, the Government cannot deliver, let subsidy continue and let the Government seek external sources of income to continue the refinery project.

After pouring out my thoughts, I hesitate a bit and wonder if my thoughts are simply a dream too unrealistic to come through or if it can actually be fulfilled.

Photo Credit: Dreamstime | Ocusfocus

Oma Ehiri is a lifestyle blogger and a Digital Media Consultant. She is also a Talent Manager with Ascend Talent Management and the Media Brand Ambassador for Veba Textile Mills.Life is her source of inspiration as she curates her thoughts on her website, www.sotectonic.com. Follow her on Instagram and Twitter @oma263.

8 Comments

  1. A Real Nigerian

    June 10, 2015 at 7:10 pm

    What is the meaning of this uninteresting, poorly-delivered and beta article on a topic that has been revisited over and over again?
    No life, no spice; just a two-bit article that is anything but nice.

  2. XO

    June 10, 2015 at 8:56 pm

    Lol, Please if you don’t know how these things work a simplistic solution doesn’t make sense.

    1.Get that PIB signed!! It’s a liitle ambigous but it touches on every area.
    2. Government should provide companies with adequate buses?? I’m not sure you’ve looked at the cost implications and it reads like creating a subsidy to remove a subsidy. Why should the government be buying buses for companies that make profits? If there is an active union in your company it should approach the company with their demands or go to an industrial court.
    3. Refineries should be start functioning in 6 months?
    In Oil, there’s deregulating of the upstream and the downstream. The refineries are the downstream,
    I honestly wish i can educate you a bit on how the oil sector works but i’d be writing a thesis.
    So, read up on the oil sector in general, why the subsidy needs to go, get a powerpoint copy of the petroleum industrial bill and read(it is quite explanatory), why refined oil isn’t as profitable as the crude, why the refineries can’t function properly under the NNPC Act and that’s why it should be broken.

    Anyways, Goodluck.

  3. XO

    June 10, 2015 at 8:59 pm

    Sorry i forgot to add, sticking to that subsidy is making us lose money, leaving us in debt and the price of brent crude oil has fallen to under 70dollars, so we’re basically running into trouble to keep people happy for a short time because in the long run we’ll be feeling like it should have gone since. (which it should have in 2012). So it’s a case of postponing your suffering till when the heat gets hotter.

  4. nnenne

    June 10, 2015 at 10:58 pm

    Nigerians and their sense of entitlement! Companies and government should provide transportation for all. How nice.
    Socialist system of government is part of the reason why our development is retarded.
    How about individuals, groups, corporations, seeing the gap, investment in transportation?
    Organize it in such a way that it will benefit all, especially workers at reduced prices, especially for people who commute a lot?
    Experience has shown that most things ran by our government eventually dies off.
    CAPITALISM is the way forward.

  5. nnenne

    June 10, 2015 at 11:02 pm

    Let the citizens tackle their issues more, while the government create enabling environments and regulations.

  6. Fleur

    June 11, 2015 at 12:25 am

    I wont push back on your attempt to try to find a logical out of an illogical situation. But more refineries?? – if people are smart, they wont let that happen. Anywhere you have refineries in the world, you have higher lymphohematopoietic cancers because of benzene and 1,3-butadiene mostly. We are not talking stack emissions, which might be controllable. We are talking massive fugitive emissions from the refinery just running. Unfortunately for the people in Rivers State where the refinery and petrochemicals plant are side by side,na doube jeopardy. Let’s not mention the fertilizer complex.
    What to do? Let us invest in green technologies and reduce our dependence on a very dirty (in every way possible; from cradle to grave) fuel.

  7. Energy Freak

    June 11, 2015 at 9:43 am

    Oma, I wish the solutions to this age-long crisis is as simple as enforcing companies to provide buses for their staff. Why I applaud your point of view on this issue, I agree with XO that you need to do a thorough research on the oil sector and maybe you can understand the depth of the problems.
    1. Subsidy MUST go. It is very true that the average Nigerian will bear the weight of this decision but it is a necessary evil that must be committed for the greater good. Subsidy is just a large tarpaulin covering corruption, debt and fraud because the exact amount spent in the so called subsidizing cannot even be verified (The PWC forensic audit has shown that).

    2. Our dis-functional refineries is the reason why subsidy arose in the first place. I am not really sure but I think Nigeria is probably the only oil producing nation that has no functional refinery. Venezuela has a state owned refinery ,which provides for both their domestic needs and international supply. India is not even one of the OPEC member countries, yet it has one of the biggest private owned refineries in the world built by the reliance group.
    We need to get our refineries running, this to me is the biggest solution to our problem. Dangote has set the pace for private investment in the refinery business, other investors who are interested should be awarded licenses to do the same. The whole NNPC ACT thingy should be broken so that these investors can make profit as well. Is the Government interested in doing it the Venezuelan way, then they should sort themselves out and get on with it. Is this achievable in 6 months? hehehehehehe
    3. Like XO said,the Petroleum Industry Bill has embedded in it, laws that are favourable for every part of the oil sector. It should just get signed already!

  8. EllesarisEllendil

    June 11, 2015 at 12:19 pm

    The above comments are why I enjoy this site. We may not always agree but you guys are damn smart………….some of you.

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