Buhari succumbs to imperial policies

By SUNDAY ODIBASHI

THE increase of pump price of petrol to N145 per litre from N86.50 by the Minister of State for Petroleum, Dr. Ibe Kachikwu, 1st week, has continued to generate new questions about the country’s socio-economic development framework under the All Progressives Congress-Government.

There are merging indications that in contending with the rigours of reviving the ailing economy, President Muhammadu Buhari beginning to succumb to pressures from the conflict of interests between the governing and ruling elites struggling for the control of the country’s economy. Contrary to populist expectations that President Buhari will harness his leadership potentials to tame the ravaging elites, who many stakeholders in the Nigerian project, consider catastrophic parasites on the country’s economy and body politic, the President, hypothetically, is beginning to subscribe to the status quo ante, retaining the same political economy of state exploitation of citizens which is being expected to be changed.

The increase of pump price of petrol to N145 per litre from N86.50 Kachikwu succeeded the earlier increase in electricity tariff by the Minister of Power, Works and Housing, Mr. Babatunde Fashola.

Both Kachikwu and Fashola have noticeably demonstrated penchant for modernization paradigms in public policy formulation, promoting imperial policies, than subscribing to basic development processes in economic transitions of peripheral economies in the international community.

Apparently, some stakeholders are of the view that the ministers appear to be, hypothetically, misleading President Buhari into neo-liberal policies amenable to entrenching a bourgeois state which promotes more of the interests of the minority rich than the majority poor.

On May 2, 2016, Kachikwu had disclosed that the government was subsidizing petrol with N12.62 per litre at the price regime of N86.50 per litre. Adding the subsidy margin to the former selling price will make a total of N99.12 per litre. Ironically, the minister approved sudden increase to N145 per litre, a margin of N58.50 under the guise of deregulating the downstream sector of the oil industry.

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Most appalling on this policy is that Kachikwu acknowledged a deliberate infliction of pains on Nigerians by the government as panacea to federal government’s (mal)adjustment to the economic challenges of the country. He had declared inter alia, “we share the pains of Nigerians but, as we have constantly said, the inherited difficulties of the past and the challenges of the current times imply that we must take difficult decisions on these sorts of critical national issues.”

However, rational governments all over the world are known to take difficult decisions for the good of the people and capacity building for the economy. For instance, North Korea has been developing its nuclear weapons and missile capabilities against strong opposition from the United States of America, South Korea and others; this is a lucid example of difficult decision by a government committed to the development and empowerment of the country to be competitive in the international system.

The Petroleum Products Pricing Regulatory Agency (PPPRA), in announcing the new price regime, indicated that in the new pricing template, filling stations are now to sell at a maximum of N145 per litre. Kachikwu had in his ministerial briefing in Abuja said that Nigerian National Petroleum Corporation (NNPC) will sell at pump prices below N145 per litre.
Contrary to the deregulation assumption, the PPPRA had admitted that the oil sector was still under the government’s price modulation policy and not deregulated.

The PPPRA had in a statement by the Acting Executive Secretary, Mrs. Sotonye Iyoyo, highlighted: “statutorily enshrined in the PPPRA Act No 8, 2003, is the responsibility to moderate pricing for the Industry. In performing this role, the PPPRA commenced a petroleum products price modulation framework on the First of January, 2016, with the aim of ensuring a ‘fit-for-all’ approach that seeks to serve the interest of the Nigerian consumers, marketers and the economy.”

The Executive Secretary had also declared: “In furtherance of its mandate to ensure the efficient supply and distribution of petroleum products, the PPPRA hereby announces, effective immediately (May 11, 2016) that the new price band for PMS shall be at a maximum of N145 per litre. However, NNPC Retail stations on the outskirts of major cities are advised to sell at price lower than N145 per litre.”

The new price regime may reflect a policy summersault on the realities of the country’s development crisis. Kachikwu had in April lamented that it is cheaper to import petrol from foreign economies that to refine in Nigeria where the crude oil is deposited. The major challenge of government would have been to work on the technology and other variables responsible for the high cost of production.

Accordingly, Kachikwu had subtly identified that the major change mantra of the APC-government which is economic transition to production and wealth creation.

The minister, however, stated: “we expect that this new policy will lead to improved supply and competition and eventually drive down pump prices, as we have experienced with diesel. In addition, this will also lead to increased product availability and encourage investments in refineries and other parts of the downstream sector. It will also prevent diversion of petroleum products and set a stable environment for the downstream sector in Nigeria.”

However, it is a global phenomenon that government exists to solve societal problems on behalf of citizens. Some stakeholders have argued that, “it is, therefore, a wholesome aberration for government to shift those problems to citizens.”

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Meanwhile, many stakeholders have suspected the federal government of instigating creative or artificial scarcity over the months to have good reasons for the increase in pump price of petrol. Unfortunately, all the comparative advantage in the oil transactions have be transferred to foreign economies where production is being carried out, worsening the consumption economy entrenched in Nigeria which has consistently remained in the periphery of the global economy.

Governor Ayo Fayose of Ekiti State had expressed that “it was now clear that the scarcity of petrol being experienced in the last three months was deliberately orchestrated by the federal government to pave way for the already conceived increment.”

Fayose had declared: “when they were seeking for votes from Nigerians, they promised to reduce petrol pump price to from N87 to N45 per litre, they promised to create three million jobs per year, they said $1 will be equal to N1 and above all, they promised to pay unemployed youths N5, 000 stipend and provide one meal a day to school pupils nationwide. Instead of fulfilling their promises, they have increased petrol pump price to N145 per litre, increased electricity tariffs, retrenched thousands of workers and imposed untold hardships on Nigerians.”

Meanwhile, Kachikwu declared that the DPR and PPPRA have been mandated to ensure strict regulatory compliance, including dealing decisively with anyone involved in hoarding petroleum products.

However, President Buhari has tried to resist the pressure to further devalue the Naira against other foreign currencies, in the interests of foreign economies, but the economy lost that protection President Buhari made for the currency regime in the new price of petrol.

There is rising apprehension that populist expectations that President Buhari will deviate from the past to commit class suicide in changing Nigeria is becoming dashed.

The minister of state for petroleum had also declared that “all Oil Marketers will be allowed to import PMS on the basis of FOREX procured from secondary sources and accordingly PPPRA template will reflect this in the pricing of the product.”

The minister, however, failed to prove that the NNPC monopoly of the oil sector has be broken for open competition, or that the NNPC Act has been repealed, or that the PIB has been passed to permit competition in the sector.