A FORTNIGHT ago, I was in Lagos and with my travelling companions, we were heading for Ibadan. We were low on fuel, but the fuel stations were mini theatres of war. As we passed them, we could see low intensive combats going on. There was of course the option of the black market. But it was selling for N210 per litre in comparison with the official N87. The other problem is that at this parallel market, you could be sold adulterated fuel. We concluded that Ibadan was a saner place to buy fuel.
In Ibadan, the situation was worse. I observed a three-man team of policemen who despite their wailing patrol van, found it impossible to gain access into a fuel station which was blocked by vehicles. They disembarked, muscled their way with their guns, intimidated the station manager who reluctantly sold them fuel in the three four–litre cans they were carrying. They returned to their patrol van, sweating but triumphant. What a country!
We soon discovered that not buying black market fuel in Lagos was a serious mistake. Where the black marketers were deregulated in Lagos and could be found virtually at every turn, we could not get any all the way from the former toll gate to Iwo Road. We were told that Sabo, inside the town was where we could get black market. We had to risk the drive into town with our fuel indicator blinking. Yes, the market here was booming, but the cheapest was N310 per litre!
I reflected the type of devalued life Nigerians live. With such a high price, how do transporters break even? How do commuters, especially workers and students, get around? The small scale entrepreneurs, how do they power their generators? At what cost can farmers transport their produce to the urban markets? How do we survive without the fuel of our national life?
Doubtlessly, one of the most profitable businesses in the world, is oil marketing in Nigeria. It does not matter whether you are a minor, major, dependent or independent marketer; you smile to the bank every second. The government provides them funds to import petroleum products and pays interest rates for the same funds. So they run no risk.
As marketers, they supply what they wish, sell at prices they choose, and when they are broke, they stop importing, or marketing and the Government rushes to off load billions of Naira into the bowels of their bulging accounts. Kerosene, mainly used by the poor and manufacturers, for which marketers collect subsidies to sell at N50, they openly sell at N150.
An open secret is that some of the marketers, using the notorious ‘Cotonou’ and ‘Lome’ ships do not even bring the products into the country. They simply off load them in neighbouring countries, get the Nigerian officials to sign the necessary papers of delivery in the country, and smile to the bank. These are marketers who import in the first place. There are those who import nothing, use the names of decommissioned ships and are paid by Government.
Yet, the reason this racketeering persists and why subsidy must continue is that we do little or no refining in the country. When an oil producing country like Nigeria does not refine its petroleum needs, first, it deprives its citizens employment in that sector, but most importantly, it exposes itself to the manipulative vagaries of the so called market forces and the fraud inherent in the Nigerian subsidy regime.
In choosing to import products rather than refining, government exposes the country to two major factors it has no control over; the price of crude at the international market, and the exchange rate of the Naira. These are two important variables that drive the subsidy regime. Other factors include the added burden of freight, insurance, capital to import, interest rates, landing costs, port charges, demurrage, storage charge, lifting fuel by road all the way from Lagos, etcetera. So why would a nation be so yoked?
There is so much reliance on petroleum products partly because the power sector continues to generate more darkness than electricity. We were told that the solution to that sector is privatisation. As was done in the Babangida regime, we were told that we must embrace TINA. Not Tina, the lady, but the acronym; There Is No Alternative to privatization.
So the Power Holding Company (PHCN) was privatised by being unbundled into eighteen companies; a transmission company, six Generating Companies (GENCOs) and eleven Distribution Companies (DISCOS) Despite the privatisation a year and half ago, there is no service delivery, no appreciable investments and the foreign and local fund injection promised, did not materialise. In fact, some of the companies are yet to pay fully for the purchase. Despite these huge failures, those who purchased the PHCN companies with ‘gencos’ in their blood stream are simply dancing ‘discos’ in the banks with profits made off Nigerians.
Like the oil marketers, it is the Government raising funds for them to run their private companies; the CBN under a Nigeria Electricity Market Stabilization Facility (NEMSF) made available to them, N213 Billion to off set debts and open credit lines. So far, the privatisation of the power sector has seen the reduction of the staff by over 70 percent, the casualisation of the entire industry and the enslavement of staff.
As for the rest of Nigerians, we are stuck with the pre-1999, less than four-thousand megawatts of electricity, and private power companies that cannot even supply pre-paid meters. Thus, many Nigerians continue to be subjected to so called estimated bills and tariff increases for power not supplied.
So we are sapped of power, we are sapped of energy. Many are however optimistic that the Buhari administration taking over next week Friday will turn things around. This may well be true, but we must remember that governance is about policies, guiding principles and interests, not a religion or set of beliefs. The Buhari administration is like a crab emerging from a hole; its walking sideways, will make it difficult to determine where it is headed.