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The Rhetorical Deception On Fuel Subsidy Should Not Win, By Moses E. Ochonu

Jun 5, 2023

It’s disheartening to see a dubiously contrived consensus emerging among unsuspecting and otherwise critically-minded Nigerians on fuel subsidy.

The rhetorical offensive of successive governments on the issue is sadly proving successful. The debate has now shifted from whether petrol, the single most consequential product in our economy that directly or indirectly drives all economic activities, should be subsidised, to when and how subsidy should be removed, and how the government should invest the resulting revenue boost.

That’s exactly how the political elites want it. These are their preferred terms for discussing subsidy. This framing exculpates them, blames the nebulous and externalised concept of “subsidy corruption,” and demands nothing from them to help fix the fiscal mess we re in.

But the main issue is not about the corruption in the subsidy regime. They are trying to shape and shift the terms of the discussion to only focus on inflated subsidy invoices, which they had been paying to their favoured subsidy claimants.

Nigerians should stop falling into the political elites’ well-laid rhetorical trap for justifying the effort to transfer the cost of their greed, incompetence, and corruption to the masses.

A serious government that’s not implicated in the subsidy corruption and that truly wants to audit its subsidy waste will take measures to clean it up so that only legitimate subsidy claims are paid. This is the only sensible short-term fix that does not punish regular citizens for the financial sins of their political elite.

It is not about whether the proceeds of the so-called subsidy removal will be invested wisely. That is part of their rhetorical deception, their effort to distort the discussion to focus on wrong questions and wrong premises. We have seen how the savings of previous “subsidy removals” were frittered away or mismanaged, but that is the wrong conversation to be having.

There are real questions that need to be posed and which they are trying to keep Nigerians from asking by getting us to accept a flawed premise. They are trying to convince us that subsidising fuel by whatever means, which is popular in many countries, including the US, because of the positive ripple effects of affordable petrol on the real economy, is bad. They are doing so by steering you rhetorically to focus on the wrong issues. Here are the real questions and issues:

  1. If subsidy has been removed or partially removed multiple times in the past, why does the need to heavily subsidise fuel persist? Could it be that the idea of subsidy removal is a fraudulent distraction from the real issue of our loss of domestic refining capacity, despite spending millions of dollars on failed turnaround maintenance (TAM) contracts and our dependence, for the last two-and-a-half decades, on imported petrol?
  1. Related to the above, why have successive governments not tackled the root cause of the problem by restoring domestic refining to meet our petrol consumption needs?
  1. With the Federal Government being an investor, we are told, in Dangote Refinery, with the revelation by the CBN that it lent tens of billions of naira to the refinery project, and with the previous announcement by NNPC that it will supply about 400,000 barrels of our daily crude production to Dangote Refinery, which should eliminate the costs associated with purchasing and importing overseas petrol, why should fuel not be affordable in Nigeria, even if Mr Dangote adds something on top of his refining cost to make a deserved profit for his trouble? It is a mystery to us laypeople.
  1. Given the reality that, for good or ill, in Nigeria, everything in the real economy (public transportation, home and small business power generation, the service industry, the movement of goods and labour, etc.) depends on petrol being affordable, is the subsidy not worth sanitising and preserving, whatever it takes, in the short-term, in order not to destroy what’s left of the battered economy and inflicting more suffering on our beleaguered masses?
  1. Related to the above, why is it that every time the ruling political elites spend, borrow, and steal their ways into fiscal trouble, they try to raise revenue through “subsidy removal”, rather than cutting the perks of public officials and tackling the scandalous waste in the budgeting system of the ministries, departments and agencies (MDAs) of government? Is it because stopping subsidy is the path of least political resistance and leaves intact the equally costly but disguised subsidies extended to the political elites in the executive, legislative, and bureaucratic realms of government?
  1. Is the rhetoric of “subsidy removal” not a policy discourse or consensus informed by the out-of-touch narcissistic consumption habits of political and business elites who can afford expensive petrol and are thus unable to relate to how regular Nigerians will find their daily routines truncated and their survival hustles drastically curtailed?
  1. Is it not the case that if Nigeria continues to import refined fuel and cannot refine its own, the discrepancy between the landing cost of imported fuel and the pump price will resurface intermittently, no matter how many times subsidy is “removed,” as crude prices, shipping costs, and other fluctuating variables in the international economy push the landing cost up or down? Does that not mean that no subsidy “removal” is final, as our history has shown, since unpredictable developments in the global petroleum demand and supply equation and supply chain will likely, even if temporarily, produce a new discrepancy and necessitate subsidy in the future? By the way, why do we pay subsidy even in times when global oil demand is down and there’s a slow down in global economic activity? Is that not fraudulent subsidy? Is that corruption, along with the graft of over-invoicing, not the real problem that needs to be tackled if government is not lazy or complicit? Again, why skirt the real problems to implement a measure that’s not a permanent fix and will inflict long-lasting, perhaps fatal, damage on the economy and citizens’ livelihoods? Why cut off your hand because you have a stubborn, painful, but treatable pimple on it?

In a nutshell, the political elites want to get us from “paying bogus subsidy claims is bad” to “subsidising petrol is bad.”

Once we naively make that rhetorical shift, we’ve given them undeserved rhetorical victory and they’ve coyly won us over to their side.

Once that happens, we’ll be stuck discussing tangential, atmospheric issues, questions, and scenarios, leaving aside the main issues of their unwillingness to tackle corruption in subsidy payments and their failure to restore domestic refining — the short- and long-term solutions to the problem.

Moses E. Ochonu can be reached at meochonu@gmail.com