Boniface Chizea
15 November 2009
opinion
Lagos — The President of Nigerian Labour Congress, Abdulwahad Umar following the recently held demonstration by the organised labour called on the Federal Government to subject the pending deregulation of downstream petroleum sector to referendum, and to ensure that the Uwais Committee report on the reform of the electoral process is passed by the National Assembly.
I would expect that Labour demands impliedly is that the report should be passed as submitted without any alterations particularly regarding the key issues of the selection of the officer that would drive the electoral process and the need for the conclusion of all pending electoral disputes that have been taken to the court before actual swearing in to obviate the recent experience whereby impostors with often stolen mandates are allowed to parade themselves as legitimate authorities superintending and taking far reaching decisions on questionable mandates. Also organised Labour would want the implementation of the proposed minimum wage of N 52,500 up from the measly and unrealistic level of N 7,500 at which it is presently.
Labour anchors its opposition to deregulation on the fear that it would bring hardship to the already pauperised masses as the pump price of fuel is likely to go up to N 104 per litre from the current price of N 65 per litre leading to across the board increase in the rate of inflation undermining the national quest for single digit inflation. Labour calculated that given the reported level of subsidy and factoring in the estimated population of the country at 140 million that the subsidy amounts to N 5 per day for every Nigerian and therefore from this perspective that the amount of subsidy does not amount to much. And that most countries in the world provide one form of subsidy or another to their citizenry to sustain the quality of life. But in this respect we are talking of subsidy which for the past three fiscal years hovers around N 600 billion more than the national budget for capital projects!
Peter Esele, the President of Nigerian Trade Union Congress argues that deregulation should be introduced after the refineries have been fixed and after the available infrastructure had been upgraded. He also observed that Nigeria can only develop when the voices of the people count and not when god fathers and mothers select leaders and impose them on the people. If deregulation is allowed the country would return to an era of arbitrary high prices, profiteering, adulteration, artificial queues as well as endless importation of refined petroleum products. Labour then proposes that government cannot deregulate the petroleum products market now but must find the political will to checkmate leakages in the downstream sector, fix existing refineries as well as build new ones. Then ominously Labour served notice that it would have no choice but to embark on full blown strike after the rally which was the last to sensitize all stakeholders about the dangers lurking in the deregulation bogey! A former Governor of Oyo State, Lam Adesina chipped in with the scary warning that the introduction of deregulation now would probably hasten the revolution which is long overdue in the country.
On the call for a referendum, it would appear that Labour had not kept abreast of developments in the country as it was reported last year that a poll conducted by a Nigerian based Opinion Research Company showed that a majority of Nigerians (58 per cent) are aware of government's intention to deregulate the downstream petroleum sector. This investigation also revealed that 85 per cent of those aware of this policy thrust believe that it would worsen the incessant problems facing the sector and the entire populace at large. So there is already a survey and it would not take much to guess that if a full blown survey was conducted on the issue of deregulation that the response is very likely to result in a repudiation of this policy thrust. But the issue is since when did governance become a question of popularity contest? Even at the corporate level what we teach in management is that companies should as much as possible eschew decision making which is based on taking of votes. It is eminently preferable for decisions to be taken based on the reaching of a consensus. This would imply that all views are taken on board including particularly opposing views and when decision is taken in this manner it enjoys the support of all concerned and therefore nobody would say at the end when the decision has been made that they did not vote for it. Often governance is about taking hard, difficult and unpopular decisions which although might impact individual citizens negatively in the short term, ultimately is in the overall medium to long term interest of the country. And where the election process is credible those who take such decisions are ultimately accountable to the electorate.
There is no doubt that deregulation of the petroleum product market would in the near term result in price increases which would be a direct consequence of the removal of subsidy. But the expectation is that as the add on effect of the removal of the amount which is included due to corruption; as the government had argued that in effect what is being subsidized is rent seeking behaviour as recently highlighted by the revelation that a cabal at NNPC collects some substantial amount on each ship that berths on our ports with imported products which has resulted in the reluctance of those directly concerned being unwilling to stop the gravy train. It is also expected that as the situation stabilizes and competitive forces come into play that prices would reflect better the situation in the market which would be expected to result in cascading price levels. Although the situation with the deregulated diesel and kerosene market so far has not given much encouragement with regard to this line of reasoning.
I think that no position makes a better case for deregulation than the observations credited to Mr Austin Avuru, former president of the National Association of Petroleum Explorationists ( NAPE ) and Managing Director of Platform Petroleum who decried the non implementation of the deregulation policy in the last 15 years. He thinks this is due to lack of political will to follow through and argues that those opposed to deregulation are not doing so in the interest of the common man stressing that the price of diesel on which large commercial vehicles ( molue ) are dependent have been deregulated for the past three years. Everyone now buys diesel at market driven prices. So while petrol is sold at N 65 per litre, diesel is going for N 125 per litre. And that those that really buy fuel at N 65 per litre are only those resident in Abuja and Lagos while the rest of the country buys fuel at market related prices and therefore all the argument against deregulation is really for the protection of those in the two towns.
The government has cited the recent return of queues at the filling stations as making a strong case for deregulation. And we cannot agree more as it is reminiscent of our experience in the recent past when prices were jacked up without reaching a consensus resulting in the lost of valuable man hours at filling stations and the purchase of adulterated products. We are reassured that government has served notice that it would only resort to price increase carrying all stakeholders along. This country can hardly afford the disruption to economic activities which a unilateral decision in this regard would precipitate.
Chizea wrote from Lagos
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