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Killing The Monster Of Petrol Subsidy In Nigeria

If there’s anything the current Home of Representatives public listening to on the petroleum merchandise subsidy established firmly, it’s the truth that abuses within the importation and payment of these merchandise have been going on for a number of years.

The truth that the abuses have been going on for years mustn’t surprise anybody. Earlier than the restoration of democratic authorities in 1999, for instance, Nigerians were subjected to years of not simply long queues at petrol stations but also imported inferior petroleum merchandise. The off-specification gas broken car engines and in addition affected the well being of our people, with numerous those stricken by respiratory issues like asthma and bronchitis reported useless; medical experts speculate that the inferior petrol, which had an offensive smell, could cause cancer.

The abuses within the importation of the petroleum merchandise were such that the then Group Managing Director of the Nigerian National Petroleum Corporation, Bayero Dalhatu, had to publicly state that there was a large scale importation of petroleum products with out the NNPC being conscious of it, let alone being the source. Dalhatu, an engineer, argued that there was no means the NNPC, a professional and accountable organisation, could have allowed the importation of dangerous products into the country.

It was later found that the off-spec product was introduced into Nigeria by a politically properly connected family. The family was, in reality, importing all the petroleum merchandise. Because of the huge demand – given the nation’s inhabitants of 130 million then, this household couldn’t cope. The end result was perennial scarcity of gas, which gave rise to lengthy and countless queues at petrol stations, in addition to arbitrary value increases in most components of the nation.

Analysts believe that the fortune, which this household was making from gas importation accounts for the federal government’s failure to carry out a proper lube oil refining process Flip Round Maintenance (TAM) within the 1990s in each of the nation’s four refineries situated in Port Harcourt, Warri and Kaduna. The contract for the Previous Port Refinery, with a capacity to refine 60,000 barrels of crude oil per day and the lube oil refining process brand new Port Harcourt Refinery, with a capability to refine one hundred fifty,000 barrels of crude oil per day – was given to a 3rd charge European company. The opposite TAM contracts have been additionally awarded to inexperienced companies, both local and overseas.

It is necessary to restate these latest information in regards to the management of the downstream sector of the Nigerian petroleum trade because impulsively the impression is being created in some quarters that the problems, which the Nigerian public has witnessed within the importation and fee of petroleum products in Nigeria are a new creation. The impression is totally misleading.

The issues of gas subsidy should not new. They existed lengthy earlier than President Goodluck Jonathan came to energy. The truth is, the Petroleum Merchandise Pricing and Regulatory Agency (PPPRA) was created by the Chief Olusegun Obasanjo administration as part of a severe effort to solve this lengthy standing problem. But instead of PPPRA being the answer, it’s a pity that the PPPRA itself was to grow to be certainly one of the problems. Even the late President Umaru Yar’Adua was one other leader who grappled with the problem of subsidy abuses without success.

Much as the federal government determination to finish the cost of gasoline subsidy on January 1, 2012, is probably not very fashionable due to the timing and the financial hardship dealing with our folks, President Goodluck Jonathan have to be commended for not simply uncanny courage but additionally for his sincerity of goal, 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 daring choice to end the rot once and for all.

As regards sincerity of goal, another key authorities official who deserves commendation is the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke. Most petroleum ministers we have now seen on this nation haven’t been fascinated by petroleum subsidy removing merely because of their personal benefits. They have through the years used gas importation to empower and reward celebration loyalists, family members and buddies, which profoundly hurts Nigerian residents. In other words, it isn’t in the private curiosity of a petroleum minister to take away gas subsidy. For daring to be totally different Mrs. Alison-Madueke deserves kudos.

Looking again over Alison-Madueke’s tenure as minister, it is easy to see a consistent pattern of trying to solve this drawback. Even earlier than the problem of subsidy elimination got here up, the minister insisted on getting the original builders of Nigeria’s 4 refineries to carry out the Turn Around Upkeep. The explanation for choosing the unique builders is to end the practice where the refineries fail to work even after TAM has just been completed because of the low calibre of the contractors. The unique builders of the refineries are world class engineering companies. Therefore, they have a repute to guard.

By the point the TAM is concluded within one year, even if there aren’t enough petroleum merchandise for native consumption from the four refineries, which collectively have the capacity to refine 445,000 barrels of crude oil per day, the demand for imported fuel will cut back drastically. This development can have an immediate salutary impact on the country’s expenditure on gas subsidy and on our international trade reserve, as well as on employment and business opportunities for lube oil refining process the Nigerian people.

In response to the issues that had been brewing in PPPRA, Mrs. Alison-Madueke inaugurated final November a new workforce on the PPPRA with the mandate to wash up the mess. Since then the brand new PPPRA management has taken some critical steps to sanitise the importation and cost of fuel and their efforts have been highly commended by industry watchers.

Not even the most devoted opponent or critic of President Jonathan can fail to acknowledge that his administration has demonstrated impressive courage and selflessness in tackling the challenge of importing and paying for gas in Nigeria, which has been draining Nigeria’s nationwide treasury for nicely over 10 years. If solely previous authorities officials had displayed such commitment to the common good, the petroleum subsidy problem would have been resolved way back, or would not have risen at all. The President Jonathan administration has, as soon as again demonstrated the virtue of putting nationwide service above parochial and private interest. We’re impressed.

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