Ile-Ife, Nigeria: “why do you transporters exploit the poor in the name of fuel price hike?” a passenger complained.
“Why do you talk about transporters alone? What about foodstuff sellers? Price of Garri has increased by over 50 percent in the past 5 months; why didn’t you condemn those sellers?” the driver replied.
“But they are also reacting to your incessant fare hike?” the passenger retorted.
“But I’m also a victim. I also buy those goods. See, I paid over N15, 000 for various ridiculous registrations to the state government. I bought a liter of petrol at night at N120 per litre. In fact, it was war. At one place, young men used cutlass to settle fights at filling station while a head was broken in another today,” The driver explained.
“But must you ply the road at all cost?” another passenger queried.
“You want me to take to robbery at my age?” the driver replied…
Current Bosses’ strike and Re-deregulation
The current fuel scarcity clearly manifests the treachery of the deregulation policy. Despite government’s cover-up on the current fuel scarcity, media reports have fingered oil marketers in what can be termed bosses’ sabotage – an attempt to force deregulation and price increase on the people. While many media organizations were quick to condemn tanker drivers for protesting against extortion by Lagos State government in the guise of maintaining law, hardly is anyone condemning oil marketers’ sabotage in defence of fraudulent profit. Yar’Adua government is ready to allow these oil marketers free reign in exploiting the country. To government, deregulation is necessary because the subsidy on fuel pricing has led to huge corruption and looting of the treasury by unnamed people. How many of these public looters have been probed or prosecuted? None! What an irony: an “anti-corruption” government accepting the superiority of gangsters. Actually this irony only reflects the character of every capitalist state, which in defence of big business, will violate its own rules and use every illogic to justify its somersault.
The argument of Yar’Adua government to justify deregulation is a continuation of the old worn-out excuses. The excuse of the Obasanjo government for incessant increase in fuel prices is that government is spending tens of billions on fuel subsidy; therefore the poor people must bear the brunt through fuel price hike. Yar’Adua government has only stepped this up by exposing that the subsidies have only gone to the sharks in big oil marketing business and government. But, what are government’s alternatives to this obviously maddening scenario painted by the government itself: arrest the looters? Stop the financial hemorrhaging of the nation? Obviously not – but making the people direct victims of the looting: more deregulation.
According to Prof. Sam Aluko, oil marketers make at least $160,000 on a ship-load of refined fuel to this country. This is aside profit to be made by shipping companies and private port managers, among other sundry charges that will add up to extra 40 percent of fuel cost. With the country’s refineries working at less than a third of its capacity, Nigerian government has already privatized fuel production and deregulated its importation, while only using public resources to subsidize the profit of the oil marketers. Therefore, the latest attempt is only a re-deregulation of this obvious robbery. In the “subsidy” deregulation system, the Nigerian government use public resources meant for the development of social infrastructures to service the profit interests of fuel marketers, their bank creditors, shipping companies, private port managers, etc. In the planned re-deregulation, the poor people are to directly bleed out billions in profit for these fat-cats while government also doles out billions through other means to these fat cats.
Private Refinery: Sheer Mirage
Worse still, whenever there is crisis for oil importers, government will immediately intervene on their behalf (tax break, special offer, price flexibility, cheap credit, etc) the same way that it fixed the price of petrol at N65, even when crude oil price has necessitated a decrease of petrol prices to about N50. Therefore, the planned re-deregulation is a cover to protect profit. Some have argued that ultra-deregulation will ‘encourage’ private investors to invest in oil refining. But, funny enough, while tens of persons were given licences by Obasanjo government to build private refineries, these shylocks have converted these into licence to import refined fuel, no thanks to the connivance by the pro-capital Obasanjo government. In fact, Shell Nig. Plc, Nigeria’s biggest multinational oil company, while excusing itself from investment in oil refining claimed that it will cost around $2 billion to build a refinery. How many local investors can commit this amount to a long term project like refining?
The main reason why these oil companies (both local and international) will not build refinery is simply the fact that they depend on short term profits and not long-term investment that will tie down their capital. This explains why the financial sector of world capitalism overtook the industrial sector (in US, manufacturing share of GDP fell from 25% to 12% while financial share increased from 12% to 20.5% from 1973-2008), which led to the current global economic crisis that has foreclosed any tangible investment especially in the third world. Nigeria’s case is worsened by the terrible state of the nation’s infrastructures which has made investment in the country costly. Nigerian capitalists are parasitic, who like their Russian counterparts, only mushroomed on the decays of mismanaged national economy. They are the beneficiary of government’s hand out of public resources to private hands – privatization of public corporations/oil wells, commercialization of social services, official corruption cum nepotism, etc. They only care about how to sustain this arrangement. This is why they will prefer to buy the nation’s refineries, cement companies, telecomm companies, oil wells, etc at token where they can easily sell their estates to make quick profits. Therefore, the likes of Adams Oshiomhole, (a former labour leader) who want oil refineries to be sold should stop deluding themselves; no tangible investment can come from these fat-cats.
Can Private Refinery Resolve Energy Crisis?
However, assuming without conceding that private individuals invest in oil refining, as is being hoped by some pundits, can this alleviate the suffering of Nigerians? In the first instance, the refining will be hijacked by a clique as most of these moneybags can hardly bear the risk alone thus leading to formation of cartel and monopoly – the example of NNPC privatization in 2007 where a cartel of big companies, banks and foreign firms bid to buy less than a third of NNPC at fraction of its value is instructive. Thus, the question of competition and consequent price reduction is out of it as demand and supply will be manipulated for price increase. Moreover, these companies (both local a
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