DEREGULATION EQUALS FUEL PRICE INCREASE!

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TOTAL OPPOSITION TO DEREGULATION!

Martins Onovo (leader of Strategic Union of Professionals for the Advancement of Nigeria, SUPA) could end up been another hero in the eyes of millions of toiling masses in Nigeria. What did he do? He came out with more facts, figures and arguments that further confirm that fuel prices increases can never work and has never worked in Nigeria since the first increase on Oct 1 1978 by the then Obasanjo military regime. And that the current plan to totally deregulated would not only fail but would lead to more terrible conditions for the economy and masses as a whole.

He further confirms to the Nigerian labour movement that the entire policy of deregulation is a hopeless fraud that is not in the interest of the country’s economy and people. Although he may not offer a workable alternative to deregulation or to explain correctly the reason why the Yar’Adua-Jonathan regime is desperate to kill the masses with deregulation, his shocking revelations does confirm that labour must unconditionally remain opposed to deregulation.

At a TV programme held sometime in March, where he and a trade union official representing oil workers were invited to discuss the issue of deregulation, many people considered him as the real union representative while the union official was seen as a government official.

The position of the government is so bankrupt that last year Workers’ Alternative, WA, had to reproduce the same article against deregulation twice because the regime offered no new arguments. It is still the same old argument they have been parroting since 1978!

It is quite unfortunate that at a time when even members of the elites, professionals, etc, are coming out to openly condemn and expose this mispolicy, the leadership of the Nigerian labour movement both NLC and TUC are sending out confusing signals and have refused to lead the working class against this crime.

Rallies were held at selected cities across the country last year where millions of people stormed the street in support of Labour’s protest against deregulation and for wage increase. However, towards the end of the year the situation changed. The Yar’Adua-Jonathan regime organized artificial scarcity of fuel nationally and fuel prices hit the roof; this was between Nov 2009 to Feb 2010. It was then that the new position of the leaders of Labour came out that they would support deregulation if government met certain conditions.

These include government must repair all the refineries and pipelines, repair the roads, among other things after which the deregulation of the oil sector can take place. The key question remains if the refineries were working, the roads were functional and every thing is okay, why then deregulate.

Of course, the argument can be put forward that the labour leaders want to fool the government but we all know that the bourgeois government representing the interests of the rich and their imperialist masters cannot readily be fooled rather they are the masters in 419 (trickery). However, inconsistencies by the leadership of Labour can lead to demoralization of the masses, a situation that could make it very easy for the sinister plan of the regime to be carried out. This was the reality between Nov 2009 and Feb 2010.

Instability of Yar’Adua-Jonathan regime responsible for current grace

It was not until mid Feb 2010 that government ended the artificial scarcity and this coincided with the emergence of Goodluck Jonathan as acting president. A new regime effectively came onboard and it wanted to be in the good books of the masses. This was why the Jonathan regime ordered for the ending of the artificial scarcity. However, from day one the regime made it clear that it was committed to deregulation and other anti-people policies but needed time to consolidate power before it can launch the attack. The regime has since continued with the massive campaign for deregulation.

The fact that both Yar’Adua and Jonathan have not succeeded in increasing the price of petrol confirms their fear of the strength of the Nigerian working class. Even in the face of a compromised labour leadership, the working masses can fight and will fight. This was why the regime could not directly increase price but had organize artificial scarcity between Nov 2009 and Feb 2010.

Goodluck Jonathan knows that a direct price increase in petrol now would definitely provoke strikes nationally, which will definitely undermine his regime and ambition.

In addition, the price of oil internationally has remained stable at over $78.00 per barrel since the beginning of the year, thereby providing the regime with some room.

However, this current ‘grace’ will definitely not last. Even now, only the major cities have regular fuel and sell at the official price of N65.00 per litre. The other products, diesel, kerosene, etc, have deregulated price regimes and their prices have been on the rise. The desperation to ‘deregulate’ remains high on the to-do-list of the regime.

In addition, the Goodluck Jonathan regime is plotting to increase Value Added Tax, VAT, by a 100 percent. This is bound to increase all prices.

Deregulation – a failed option

The proponents of deregulation, both ignorant and contracted, continue to present it as a magic wand that will save Nigeria. They cook up various figures of revenue lost to none existing fuel subsidies and how we will enjoy if they ‘subsidies’ were removed. However, we have been hearing this for decades; the results remain negative. Globally, the option of deregulation remains a colossal failure in all the countries the IMF-World Bank imposed it.

Today, fuel in Nigeria is the most expensive in all the oil-producing countries of the world. The refinery capacity has collapsed; fuel for domestic use is now mostly imported. The national pipelines are obsolete and trucks are the main means of fuel distribution in Nigeria today.

For over twenty years since so-called private sector has been given licenses to build private refineries not one had been built.

The call for deregulation now, at a time when we are seeing the monumental damage the so-called private sector (entrepreneurs) did to the banking sector is a confirmation of degeneration. Over a trillion Naira of taxpayers’ money have gone to the banking sector to keep it afloat after the ‘major investors’ expropriated depositors’ funds on a massive scale. Of course, this is not called SUBSIDY; they call it BAILOUT.

The policy of deregulation of the downstream oil sector mainly includes allowing the ‘market forces’ to determine fuel prices, and the sale of the refineries and other facilities to the private sector.

We need to ask where were the so-called private sector when the taxpayers money were been used to build the refineries, pipelines, fuel depots, etc, over the years? They were definitely nowhere to be found! On the bases of ‘deregulation’, the current infrastructure could never be built.

Till date the overall majority of imported supply is acquired by the NNPC. The major marketers who also import fuel depend heavily on loans from banks, which the government also stands as grantor.

Since the price regimes of diesel and kerosene were deregulated, they have only move in the upward direction.

In spite of all the trillions of Naira that have been made over the years from fuel supply locally, there is practically nothing to show for it except the emergence of super rich elements (now called ‘big boys’). These czars of fuel importation made billions of dollars at the expense of the masses.

Desperate to deregulate, Desperate to loot

That there is no subsidy on fuel in Nigeria is no longer news. The government’s insistence that it is subsiding fuel to the tune of hundreds of billions of Naira is greatest conspiracy and crime against the masses. The first fuel price increase was carried out by Obasanjo on Oct 1 1978; then in was increase by one kobo, now the price is N65.00, where is the subsidy?

The poorly doctored figures the government continues to roll out expose lots of fraud. A bulk of the charges is actually fees paid to government agencies. Demurrage charges in Nigeria are the highest in the world thanks to policy of selling cheaply (concessioning) the ports, demurrage charges start when the oil shipment leaves the port of source rather than when it gets to the destination port.

What the government calls subsidy that it pays to the independent marketers are actually refund on government charges that they pay when importing fuel.

From independent observers, the real cost of petrol at the retail pumps in Nigeria now stands at N31.50!

The bulk of the billions of dollars made from the downstream sector end up in private purse and vaults of big corporations, while millions of people continue to live in abject poverty.

The policy of increasing fuel prices is part of the IMF-World Bank programme of making the poor pay for the crimes and the crisis of the rich. The logic is if the government increase the price then the money made can now be used to service the government fictitious debts and pay off big corporations and individuals.

However, fuel price increases inevitably leads to higher prices, inflation, which makes nonsense of the wages and income of the masses. Inflation hits the government very hard too as all contracts have to be reviewed upwards. It is usually very easy to review contracts upwards as the companies make more money in the process. However, when it comes to increasing wages of worker to match the rate of inflation they declare there is no money!

Rising inflation inevitably leads to devaluation of the currency, meaning further wage cut. Meanwhile, there is a conscious policy of devaluation of the currency also inspired by the IMF-World Bank. The consequence of this is increase the cost of fuel and the subsidy argument starts again.

These policies are designed to benefit only the rich and to shift the burden of the crisis on the heads of the masses. This is a tragedy.

Socialism

Certainly, he who feels it knows it. Solution to the crisis in the society can never come from those responsible for the crisis. The Nigerian ruling elites and their imperialist masters can never proffer a solution to the crisis. What they are particular about is making more money no matter how impoverished the masses are and no matter how much damages the environment is.

That in spite of the colossal failure of the policy of price increases and deregulation they still hold on it as a magic wand because of their selfish interests confirms how degenerate they are and how impossible it is for the society to move forward.

Therefore, it is clear that the Labour movement must work towards taking political power and concretely address the crisis facing the society.

The total take over of the downstream oil sector under the democratic control and management of the working class remains the only solution. This entails the nationalization of the big marketers and foreign multinationals that are responsible for the crisis.

The boosting of local fuel production and the development of petrol-chemical sector can only be carried out in Nigeria under a nationalized economy with working class control.

What must be done now

Labour must remain unconditionally opposed to deregulation. Workers must continue to put pressure on the leadership of their unions not to sell out their interests. The issue of deregulation through the backdoor by creating artificial scarcity must be challenge by the Nigerian labour movement.

And the Nigerian Labour Party must be built with a solid working class base to prepare to take power come 2011.

We must remain opposed to fuel price increase and deregulation!