Killing The Monster Of Petrol Subsidy In Nigeria

If there is something the latest House of Representatives public listening to on the petroleum products subsidy established firmly, it’s the truth that abuses within the importation and payment of those merchandise have been happening for many years.

If there may be something the recent House of Representatives public hearing on the petroleum products subsidy established firmly, it’s the fact that abuses within the importation and fee of those products have been happening for a number of years.

The fact that the abuses have been occurring for years should not surprise anybody. Earlier than the restoration of democratic government in 1999, as an illustration, Nigerians had been subjected to years of not just long queues at petrol stations but in addition imported inferior petroleum products. The off-specification gasoline damaged car engines and also affected the health of our individuals, with quite a few those troubled by respiratory problems like asthma and bronchitis reported lifeless; medical specialists speculate that the inferior petrol, which had an offensive odor, could trigger most cancers.

The abuses in the importation of the petroleum products had been such that the then Group Managing Director of the Nigerian Nationwide Petroleum Company, Bayero Dalhatu, needed to publicly state that there was a big scale importation of petroleum products without the NNPC being aware of it, not to mention being the source. Dalhatu, an engineer, argued that there was no method the NNPC, knowledgeable and responsible organisation, may have allowed the importation of dangerous products into the country.

It was later discovered that the off-spec product was introduced into Nigeria by a politically effectively Xylene Equipmen linked family. The family was, in truth, importing all of the petroleum products. Due to the huge demand – given the countrys population of 130 million then, this household couldn’t cope. The consequence was perennial scarcity of gasoline, which gave rise to lengthy and limitless queues at petrol stations, in addition to arbitrary price will increase in most parts of the nation.

Analysts consider that the fortune, which this household was making from gasoline importation accounts for the governments failure to carry out a correct Flip Round Maintenance (TAM) within the 1990s in every of the nations 4 refineries located in Port Harcourt, Warri and Kaduna. The contract for the Old Port Refinery, with a capability to refine 60,000 barrels of crude oil per day and the new Port Harcourt Refinery, with a capability to refine one hundred fifty,000 barrels of crude oil per day – was given to a 3rd price European company. The other TAM contracts had been additionally awarded to inexperienced firms, each native and overseas.

It’s essential to restate these recent facts about the management of the downstream sector of the Nigerian petroleum trade as a result of all of a sudden the impression is being created in some quarters that the issues, which the Nigerian public has witnessed within the importation and cost of petroleum products in Nigeria are a new creation. The impression is completely misleading.

The issues of gasoline subsidy will not be new. They existed long before President Goodluck Jonathan came to energy. In truth, the Petroleum Products Pricing and Regulatory Company (PPPRA) was created by the Chief Olusegun Obasanjo administration as part of a serious effort to resolve this lengthy standing downside. However instead of PPPRA being the answer, it is a pity that the PPPRA itself was to grow to be one of the issues. Even the late President Umaru YarAdua was another leader who grappled with the problem of subsidy abuses with out success.

Much as the federal government decision to finish the payment of fuel subsidy on January 1, 2012, is probably not highly regarded due to the timing and the financial hardship facing our folks, President Goodluck Jonathan have to be commended for not simply uncanny courage but in addition for his sincerity of objective, as a result of he looked again, noticed that his predecessors had been unable to cease the subsidy abuses and, rightly or wrongly, he took the bold resolution to end the rot once and for all.

As regards sincerity of function, one other key authorities official who deserves commendation is the Minister of Petroleum Sources, Mrs. Diezani Alison-Madueke. Most petroleum ministers we’ve got seen in this nation haven’t been considering petroleum subsidy elimination simply due to their personal benefits. They’ve through the years used fuel importation to empower and reward party loyalists, relations and pals, which profoundly hurts Nigerian residents. In different words, it is not in the non-public curiosity of a petroleum minister to remove gasoline subsidy. For daring to be completely different Mrs. Alison-Madueke deserves kudos.

Trying back over Alison-Maduekes tenure as minister, it is simple to see a constant pattern of trying to resolve this problem. Even earlier than the difficulty of subsidy removing got here up, the minister insisted on getting the unique builders of Nigerias four refineries to carry out the Turn Round Upkeep. The explanation for choosing the original builders is to finish the apply the place the refineries fail to work even after TAM has simply been accomplished because of the low calibre of the contractors. The original builders of the refineries are world class engineering firms. Therefore, they’ve a popularity to protect.

By the point the TAM is concluded inside one 12 months, even when there aren’t sufficient petroleum products for native consumption from the 4 refineries, which collectively have the capacity to refine 445,000 barrels of crude oil per day, the demand for imported gas will cut back drastically. This improvement could have an instantaneous salutary impression on the countrys expenditure on gasoline subsidy and on our foreign alternate reserve, as well as on employment and enterprise alternatives for the Nigerian individuals.

In response to the issues that had been brewing in PPPRA, Mrs. Alison-Madueke inaugurated last November a new staff on the PPPRA with the mandate to scrub up the mess. Since then the new PPPRA management has taken some critical steps to sanitise the importation and fee of gasoline and their efforts have been highly commended by business watchers.

Not even essentially the most dedicated opponent or critic of President Jonathan can fail to acknowledge that his administration has demonstrated spectacular courage and selflessness in tackling the challenge of importing and paying for gasoline in Nigeria, which has been draining Nigerias national treasury for nicely over 10 years. If only earlier authorities officials had displayed such commitment to the widespread good, the petroleum subsidy difficulty would have been resolved way back, or wouldn’t have risen at all. The President Jonathan administration has, once again demonstrated the advantage of putting nationwide service above parochial and personal curiosity. We are impressed.