Written by Ayo Ayodeji Saturday, 17 December 2011 04:38
No to deregulation!
Nothing can testify to man’s bestiality towards fellow man as the current attempt by the Goodluck Jonathan’s regime attempt to further increase the price of petrol. Nothing is as wicked as this program and it has fully exposed the true face of the regime to the overwhelming majority.
Coming at a time when the overwhelming majority are living in abject poverty with no hope in sight, large numbers are living on less than $2.00 a day. This will no doubt be a death blow to many in Nigeria.
Unemployment has reached record levels, factories are closing down by the day, mass migration is taking place from the rural areas that are now poverty centers to the cities, all infrastructures collapsing – road, schools, etc.
A regime of poverty wages and terrible working conditions now reign in the factories and work places round the country.
The gap between the rich and the poor is now so huge to the extent that it was recently confirmed that less than 6 % of bank depositors own 88% of all bank deposits in Nigeria. The remaining 94% of depositors mainly the working people and poor own about 12% of bank deposits in Nigeria.
Why would this not be when senators, governors, reps, etc, in Nigeria are earning much more than the president of the USA; when so-called elected men in Nigeria consume a large and growing part of the overall income of the country.
Despite the poverty in the land, Nigeria is said to have recorded over $247 billion GDP, with over $36 billion in foreign reserves, and an estimated $180 billion expected from total sale of oil this year.
In essence, there is poverty in the midst of abundance. This reflects extreme cruelty.
We have witnessed over 18 fuel price increases in Nigeria and the arguments of the proponents remain the same since the 1970s. This confirms the extreme shallowness of the various regimes representing the interests of the Nigerian elites and their imperialist masters.
No subsidy on fuel!
The claim of subsidy is topmost on the lips of the agents of government calling for increment in fuel prices. They claim that an unnamed cabal is milking the country via subsidy. They come up with all sorts of figures to justify their claims.
However, in their desperation, they put forward arguments that are totally illogical; they lie with ease and put forward figures that never add up whenever they are subjected to independent investigation.
They raise alarm that if ‘subsidy’ is not withdrawn the country will collapse. However, there are so many facts available to debunk all these shallow and illogical arguments.
In 1978, they claimed there was subsidy when petrol was sold at 15 kobo; today, 2011, they still claim there is subsidy after an over 4,300 % increment; how come? When will there be no subsidy? By how many times have the wages of Nigerian workers been increased since then?
How can there be subsidy when the funds used to pay for the fuel is coming from the sale of fuel both locally and internationally?
One of the most guarded secrets in Nigeria today is the actual price of fuel from the foreign refineries it is acquired from and the internal working of the entire oil sector both upstream and downstream. The reasons for this are not farfetched from the fact that if the truth is known there would be a revolt.
The government agents have been giving conflicting figures of the cost of subsidy, varying between N1 trillion to N3 trillion for last year. However, the national assembly declared that it was actually to the tune of N450 billion for last year. The question is what was the source of that fund? The N450 billion came from oil sales, so how can that be subsidy?
In spite of the conscious attempt to cover up the workings of the entire oil sector and confuse the public, we can still see the realities of the situation. These realities further confirm that the various regimes are out to milk the masses to their bones for profit. They continue to tax fuel in order to make money.
Nigeria produces oil via the oil multinationals for both internal and external consumption. 445,000 barrels per day are allocated to internal consumption and it is to be forwarded to the domestic refineries. This is not part of the country’s OPEC oil quota of over 2.5 million barrels per day.
However, the national refineries have all been sabotaged. Since 2003, this quota is being sold on the international market with the initial understanding that its proceeds will be used to pay for the country’s fuel importation.
Prior to 2003, the 445,000 barrels per day is sold to NNPC at near production price and if the Nigerian refineries were down it is exported to foreign refineries and the country just pays for the cost of refining. The refined products are brought back.
However, in order to make much more money this method was abandoned in the interests of the multinationals and the very rich in Nigeria. All the Nigerian refineries have since been grounded and the government is planning on selling them cheaply.
The total sale of the 445,000 barrels per day for this year alone amounts to about $14 billions at $90.00 per barrel. This is more than enough to pay for the importation of all the country’s fuel.
Petrol is currently sold at N65.00 per liter and this price actually covers the cost of importation and still gives profit to both the government and the oil giants doing the importation.
The claims of the government agents, PPPRA, that the landing cost of petrol is N128.00 per liter is extremely fraudulent. As at October 2011, when the figures they put on their web site were added the result was less than N15.00 per liter. They have recently edited the web site.
However, just recently, another government agency, the DPR, recently made a slip by revealing that landing cost of petrol is actually N48.00 per liter.
A lot of fraudulent figures and processes are added in order to inflate figures to give the impression that there is subsidy. For instance, fuel ship tankers are always to berth in Nigerian port for two weeks after arrival at the port in order to increase the demurrage charge. This is in spite of the fact that demurrage charges for tankers of fuel in Nigeria starts from the day the ship is loaded with fuel in the foreign refinery.
Fuel importers (fuel cabal) pay these dubious and inflated government charges per importation. These funds are then refunded back to them after the entire importation process, all these to give the impression that there is fuel subsidy.
A hell lot of corrupt practices go on within this highly fraudulent process. For instance, the fuel importers do a lot of over invoicing. They inflate the volume of fuel they plan to import; pay the charges for that volume of fuel but import less than what they declared. They paid back the funds for the government charges for the inflated volume. They make money from both ends, from the government and from selling the fuel to Nigerians.
This is a open secret which the PPPRA also acknowledges but refused to act on in spite of the fact that it is supposed to have power to bring the crooks to book.
Anyhow we consider the issue, there are no subsidies on fuel in Nigeria; fuel is paid for from the sale of the 445,000 barrels per day domestic allocation to the international market and the direct sale of fuel to the public at a direct price currently higher than its actual cost.
Workers’ Wages, Devaluation & Fuel prices
The whole essence of fuel price increment is to shift the burden of the crisis created by the elites on the heads of the working people. It is to suck more blood from the veins of the working masses and has nothing to do with subsidies.
The Nigerian government has been taxing fuel over the years as a means of making money. They do not call it tax in public that is why the preferred term is subsidy in order to deceive the working people.
The government over the years has imposed series of IMF/World Bank economic policies part of which is fuel price increment.
They devalue the naira as a means of cutting the actual wages of workers. Devaluation is usually followed by increase in the prices of goods and services above their corresponding value.
This is why in spite of the higher quantity of naira notes that workers earn today, Nigerian workers in the 70s & 80s actually earned more than the workers of today.
The current attempt to increase fuel prices is coming some few months after the increase in the national minimum wage to N18,000.00 and 140% across the board. This is yet to be implemented nationally; many state governments, government corporations and private companies are still resisting its implementation. However, the naira has been devalued and they are already increasing the prices of various commodities and services. That is, giving with the right hand and taking it back with the left.
Devaluation of the Naira increases the rate of inflation and therefore increases the rate of exploitation because the actual wages of the workers have been cut due to devaluation.
What has been changing since the late 70s till date has been the value of the naira. The value of the naira has massively depreciated since the mid 80s till date. As at 2007, when the last increment in petrol price took place the value of the naira was about N118.00 to a dollar; it is now at about N160.00 at the official market and much more at the black market. It is said that it would go to as low as N200.00 to the dollar.
As at the time the minimum wage was approved the naira exchanged for about N150 to a dollar; N18, 000.00 was equivalent to about $120.00. At N200.00 to a dollar, the current minimum wage would be equivalent to $90.00. In essence, wages of the Nigerian workers would have been reduced by 30%.
Workers’ minimum wage in the early 80s was N125.00, which was equivalent to $250.00 then, as the naira was exchanged at N.5 to a dollar then. This imply that the wages then is actually equivalent to more than N31,000.00 today. $250.00 in the 80s is equivalent to more than $560.00 today.
As at the time the minimum wage was N125.00 in the 80s, the price of a brand new Volkswagen car was about N5,000.00. All these changed in 1986 when the IBB started the implementation of structural adjustment policy, SAP.
The government devalues the naira and increase the prices of goods and services then hold down the wages of workers. The prices are actually increased to the level above the corresponding prices before the devaluation. The same applies to fuel prices.
The money they make from this crime is then used to pay fictitious local and foreign debts, and goes into private pockets of the elites.
If they are really concerned about subsidy why can’t they increase the value of the naira to the level it was before devaluation? They would not because that would mean more money for the workers. They actually want to pay workers less in order to make more profit.
Today, over N3 trillion has been used to bail out Nigerian distressed private banks and more billions are still expected to goes to the banks. These banks mismanaged trillions of naira but they were rescued with public funds. Of course, they don’t call this subsidy they call it bail out.
Throughout the period of the global oil boom, the Nigerian masses did not see any improvement in their lives; they only saw pain and more poverty. The enormous wealth was shared by the Nigerian ruling elites and their imperialist masters who own the oil multinationals. As the global economy is now heating up, it will have a negative effect on countries like Nigeria as the price of oil is bound to fall.
In the face of any shortfall, the elites are bound to try shift the burden on to the heads of the masses. They are never ready to pay for the crisis they create they always push it on the heads of the masses.
Corruption & Failed Promises
To say the government and the Nigerian elites are corrupt is to say the most confirmed fact. The fact that the so-called cabal profiting from subsidy cannot be named today reflects this reality.
Since 1999, when the civilian regime started increasing fuel prices, an estimated over N30 trillion had been made and there is nothing to show for it. The roads are bad, no hospital, no power, etc, the country has been moving more backward.
The Nigerian masses have lived through years of failed promises. This is why the promises been made by Goodluck has no hearing what so ever among the masses.
In the past the NNPC was solely responsible for the importation of fuel. Today, it is big multinationals, associates of top government officials, etc. Billions of dollars are involved.
These are the reasons why the refineries are not working.
Deregulation a Failure!
The prices of kerosene and diesel have been deregulated since 2007 and today diesel in Nigeria ranks one of the most expensive in Africa. Same goes for kerosene which has currently disappeared from the pumps.
The real intention of government is to totally deregulate the price of petrol too. Therefore, its price can change without notice. This is the paradise land the exploiters are hoping for.
Only the multinationals and big time dealers benefit from this process. The masses are the big time losers.
Today, most of the fuel related infrastructures built in the past have collapsed – pipelines, storage depots, refineries, etc. The country is now totally dependent on fuel importation.
Since the deregulation of diesel no ‘investor’ has deemed it fit to build a refinery. It is on record that over 18 refinery licenses have been issued but none has been built since 1999. The contrary is the situation when compared with Venezuela. Further deregulation would spell more disaster.
No fuel price increase was implemented in the past without resistance from the working class, close to nine general strikes has been called on this issue since 1999.
It is unfortunate that the leadership of labour undermined this strikes. These strikes were results of pressure from the rank and file workers in Nigeria.
There had been several protest marches round the country against fuel price increases and currently it is clear that the mass majority are opposed to further implement. It may be the straw that broke the camels back.
The past strikes were usually called off by top labour leaders undemocratically without serious concessions granted by the regimes; however, the next fight backs may not be that easy to call off undemocratically by top union leaders. This is why many are quite critical of the leadership of the trade unions both NLC and TUC.
Independent protest groups are already being set up across the country. The global protest movements and revolutions would also have an influence in the impending movement in Nigeria. Top labour leaders will definitely be under much more pressure this time around. More unions are bound to experience internal conflicts as workers are bound to make attempts to remove corrupt and compromised union leaders.
The government and bosses have over the years invested heavily at corrupting labour leaders. However, in spite of this workers have embarked on struggles for better life and on many occasions they had forced the leaders to act.
Labour leaders have refused to involve the rank and file workers fully in decision making; they did not set up committees of actions round the country with powers to coordinate the strikes. These are tasks that must be done in the coming movement.
Workers’ Party and Socialism the way forward
The bulk of the problems facing Nigerian workers are political; unfortunately, Nigerian workers don’t yet have their own serious political party that can take power and start addressing all these problems.
The lack of a political alternative will make the fight backs fruitless as those responsible for the crisis will remain in power and they will continue to impose their extremely exploitative policies on the masses. These are programs designed to make the poor pay for the crimes of the rich minority and multinationals.
Currently, the NLC set up a Labour Party that it abandoned in the hands of corrupt politicians who have converted the party to platform for all forms of opportunism. The party excludes workers and it is totally taken over by bourgeois politicians of various extractions.
The party declared support for Goodluck Jonathan at the last elections.
A workers’ political party still needs to be built. Labour must reclaim its political platform from the hands of opportunists and open it to workers, youth and other poor strata of the society.
The crisis facing the society today can only be solved by the class responsible for the production of the wealth of the society, working class. Without the working people taking political power in Nigeria, the problems shall continue and get much worse.
The crisis in the oil sector can only be solved by the nationalization of the sector and putting it under the democratic management of the workers. This is opposite to deregulation.
In essence, socialism is the only way forward.
Oppose increment in petrol price!
Nationalize the downstream oil sector under workers’ control & management!
Confiscate the assets of all those responsible for the fuel crisis!