FUEL SUBSIDY: Error of the experts

The government needs to apologize to Nigerians for her insensitive decision on this subsidy removal and go back to the drawing board immediately. For the records, the total amount leading to this WORLD WAR III between FG and the masses is total at N1.3 trillion, every day, when labour go on strike Nigeria loses N320 billion, a simple arithmetic of this amount for the past five days gives us N1.6trillion- This means that in the last five days Nigerian have lost more than what we are trying to get in one year. If the government can afford to bear this loss why are they telling us that without subsidy our economy will collapse?
 Meanwhile, on a lighter mood, this financial loss is away from the fact that by October we will begin to have overpopulation because more men now have more time with their wives since all they do is to stay at home all day, by October (9 months after the strike), the product of those many jobless days will be out. Not also forgetting that crime rate is on the rise now because people are hungry, there is no money in ATM and banks are not working. This is the olimpian height of insensitivity from any government to his people.
Now, to the matter of the day, let me start by telling his excellency that Nigerians, including my humble self, are not against deregulation per se and if any example of shoddy government is needed, it is to be found in this current impasse of subsidy removal. Deregulation is a package of transition from public monopoly to competitive market. Necessary ingredients for this transition include at the barest minimum; (1) Well articulated policy review (2) Enabling legislation to de-monopolize the sector (3) A regulatory agency that will supervise the sector and implement the program (4) Attracting and licensing of private sector providers in the sector. That is what we did in the BPE with the telecommunications sector, and now the electricity industry.
Clearly when the Jonathan administration’s approach to this issue is measured against the foregoing minimum 4 ingredients, it is glaringly obvious that what we have is, at best, a knee jerk approach rather than a well thought out deregulation program. If not, who is the regulatory agency for the deregulated downstream petroleum sector? If the answer is PPPRA, is the agency well equipped and ready for this task? And where are its program? And why was the petroleum industry bill not enacted prior to the subsidy removal? Who are the private sector competitors that will replace or augment the moribund publicly owned refineries? Are we to continue to depend on the imported refined products as a substitute for local value addition and job creation?
Even if the Nigerian people should decide that refined petroleum products should be sold at the opportunity cost which is the international benchmark price, the popular will remains that the cost and size of government today is unwieldy and unacceptable.  In 2011 nearly 75% of the entire budget was spent on recurrent expenditure. The people have complained time and again that the salaries and allowances of the executive and legislative arms of government are neither affordable nor sustainable. Why has the government shied away from tackling 75% of the problem whilst devoting energy to the remaining 25%?
The bloated overheads are not only real but have been carried forward into the 2012 budget proposal such that only N1.3tr out of the total budget of N4.75tr is available for capital expenditure. Meanwhile the presidency is budgeting N1.8b to maintain ‘existing furniture, office and residential quarters’, N1.7b for travel (N724m domestic, N951m international), a ministry has budgeted N2.5b for ‘citizens call centers’ whilst the ministry of agriculture has budgeted N1.2b to incorporate commodity marketing companies. Stationery, refreshments and snacks in the presidency will consume about N2b, miscellaneous spending by the presidential villa alone totals about N1.7b for food, honorarium and something called welfare packages. The SGF and head of service will also receive over N2.5b for miscellaneous expenses including about N300m for welfare and N270m for security votes. These are nothing but misplaced spending priorities!
Moving on to the components of the so called N1.3tr fuel subsidy (by end of October 2011) the government is bent on removing, we can ignore the fact that no one in government has been able to analyze and substantiate how the amount of the subsidy ballooned or skyrocketed from the earmarked amount of N240b or between of N300-N500b in the last four years, to the N1.3tr now and focus on the fact that both the government and the people have agreed that the process and system of subsidy payments are corrupt and fraught with fraud. So the question is why this government is not as anxious to investigate and charge all those found to have abused the system as it is determined to remove the subsidy.
In Venezuela, the fuel price is N3.61 and the minimum wage is N95,639, in Kuwait, the fuel price is N34.54 and the minimum wage is N161, 461; in Saudi Arabia the fuel price is N25.12 while the minimum wage is N99,237; in Qatar it is N34.54 and their wage is N101,250. Even in Libya, the price is N26.69 and the minimum wage is N23,813 but in Nigeria, not all the 36 states have enforced the N18,000 minimum wage and we are set to move the price of fuel from N65 to N140-N200. Weep my beloved country, weep!