…ahead of May 29
•Findings on sharing $800 million palliative or using money to fix Nigeria’s four comatose refineries
Nigeria oil resources, especially petrol, seem to have brought more pain than joy to the citizens.
While nations such as Norway, Russia, UAE, Qatar, Saudi Arabia, through strategic planning and investment of the gains made from harnessing petroleum resources, have turned around their economic fortunes, Nigeria has failed to do the same.
Managers of Nigeria’s petroleum resources have shown that they are more concerned with quick-fix solutions. The implication is that the citizens are now poorer amid abundance with 130 million out of the nation’s 200 million people already living in multidimensional poverty levels.
It is on record that Nigeria is the only member nation of the crude oil cartel, the Organization of Petroleum Exporting Countries (OPEC), with no functional refinery.
This is not to say that Nigeria does not have refineries, no. Nigeria has four refineries located in Port Harcourt (two), Warri and Kaduna with a combined capacity of 445,000 barrels per day.
Many experts say they have been mismanaged in such a way that, over time, they have become moribund.
Today, despite being the number one oil-producing country in Africa, Nigeria imports refined products. Recently, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, said the nation was spending about N250 billion monthly to subsidize the importation of petrol into the country simply because all the nation’s three refineries are down.
According to her, the subsidy cost per litre ranged between N350 and N400. This has grave implications for the economy as funds which otherwise would have been used to carry out capital projects to bridge the infrastructural deficit in Nigeria are spent monthly to subsidize petrol.
The case has been made for the removal of the subsidy. To give vent to this demand, Ahmed said it will be removed before the Buhari administration winds down on May 29. But the move has now been suspended as the National Economic Council (NEC) said, last week, that the decision on whether to remove the subsidy or not will now be taken by the incoming Tinubu administration.
President-elect Bola Tinubu will take over from President Muhammadu Buhari on May 29. Indeed, budgetary provisions of only N3.36 trillion have been made to cover the first six months of 2023, that is, January to June. Making a U-turn on her earlier pronouncement, Ahmed, on Thursday, the Minister said the NEC decided at its meeting that it was not a favourable time to remove the petrol subsidy.
The same day, Labour, which had been at the forefront of the fight against the removal of petrol subsidies without fixing the nation’s four refineries, signalled the crisis to come when it warned that it will have to demand N100,000 minimum wages should the subsidy be dispensed with. The current minimum wage is N30,000. Stating the position of the Nigeria Labour Congress (NLC), the Chairman in Ekiti State, Kolapo Olatunde, said Labour leaders would not accept petrol subsidy removal without optimal functionality of refineries.
According to him, if the government insists on the removal, workers would only accept an increase of the minimum wage to at least N100,000 across the country as the ripple effect of the removal would be devastating for citizens, especially workers.
Olatunde disclosed that the removal of subsidy which “could result in the selling of petrol for as high as N500 per litre” would have an immediate impact on the prices of goods and services in the country, thereby increasing poverty level and economic challenges.
