Sunday, January 1, 2012
MUCH ADO ABOUT FUEL SUBSIDY REMOVAL
I am sitting at home in Abuja, Nigeria's federal capital, and I am contemplating a tsunami-like sequence of events! I am contemplating the cataclysmic chaos that will result from the recent removal of subsidy on premium motor spirit, otherwise known as petrol!
Nigeria is the world's seventh largest exporter of crude oil, but has little, or no refining capacity!
It imports all the refined products required to run the country!
To make prices affordable, government has had to subsidize the cost of imported products to make them affordable!
In a nutshell, our government has been paying the penalty for her failure to efficiently manage the economy by refining what we produce, to reduce cost!
With this new policy, the full cost would be transferred to the citizenry, at least those who consume petrol!
In my head, I am simulating various scenarios, and wondering how best to cope with the emerging unfriendly landscape!
What is sure, is that prices will rise contemporaneously across the board!
Petrol is the real lifeblood of the economy! It is the independent variable that determines all others, it is the nexus, and the fulcrum, the heart and soul of our economy!
It used to cost me four thousand eight hundred naira to fill my car's tank every week, now it would be costing me about nine thousand naira!
I need to pass that burden to my clients, as surely as others are bound to pass theirs on to me!
I cannot blame them, because no one is in business for charitable purposes only! I see the cost of tomatoes increasing, I see firewood costing more! I see cooking gas costing more because it would cost more to transport!
The only thing that is not likely to increase in cost, is the collective hatred of this government! That would be cheap, and abundant!
Nations rise and fall on tough decisions, but not all nations can withstand the same tough conditions! Each, with her peculiarities, requires tact, and wisdom!
Electricity tariffs were increased only in June of 2011, and they are due for an upward review in January 2012! This means that our people would be required to adjust upwards, what they pay for what are the two basic components of living in today's Nigeria!
What the government gave with the salary increase some months ago, it has taken two-fold, with the new rates!
What is heartrending, is that in the midst of these increases, the cost of maintaining those in government has gone up! They have not been asked to adjust to the new reality! Only the common people have! Perhaps there is an unseen wisdom to this apparent idiocy, it remains to be gleaned from the huge wave of losses looming on the horizon!
It promises to be bloody, it is sure to be brutal! Jobs will be lost, and comforts sacrificed! Many people will go from being barely alive, to life-support!
All because we live in a country that has not been able to manage her natural resources! If we are not able to take advantage of a commodity where we have a comparative advantage, because we produce it, how are sure of making any headway in those that are outside our control!
Many have argued that the drive to remove subsidy, was the agenda of the IMF: our politicians had robustly rebutted this assertion! It is surreal, that one week after Ghana removed subsidy on petrol, Nigeria is doing the same!
I once said Nigeria was a joke; a bad joke: I now need to retract that statement, we are not a joke, we are a nightmare: a present, and continuous one!
MAY GOD BLESS NIGERIA FOREVER!