The social contract between the people of Nigeria and its leaders integrates expectation of the highest forms of accountability, transparency and value in governance. There is no such thing as “cabal”. It is also wrong to list individual companies and categorise them as “beneficiaries” of petroleum subsidy. The original intention of the petroleum subsidy regime as envisaged under the Petroleum Support Fund Guidelines developed further to the PPPRA (Establishment) Act which set up the PPPRA has long been thwarted.
Firstly, oil trading and marketing companies are not beneficiaries of the money generated from subsidy. The primary beneficiary of petrol subsidy is every person who drives into the petrol station and pays N65 for petrol which is actually imported at a market rate and total cost that is much higher. The subsidy is simply a refund of the difference in price between the government decreed price cap and the international market price at which the products are imported. It incorporates the logistics costs of shipping the products to Nigeria.
Further, many marketers are briefcase companies with little investment in infrastructure. Most oil marketers have invested billions of naira in physical infrastructure across the country, ranging through shipping, ports, storage and logistics. These investments are operated and maintained by a corps of skilled and regularly trained professionals. A new generation of young, internationally competitive manpower, readily deployable across economic sectors has been developed by the efforts of many legitimate oil trading and marketing companies.
Additionally, indebtedness of downstream operators is evidence of fraud. In the midst of the foregoing challenges, the Nigerian public has been misinformed, and downstream operators, vilified and crucified. Most condemnable, has been the deliberate incitement of the public against legitimate business interests. The appropriate agencies of the law should by all means do their job in identifying those who have fraudulently and criminally undermined the system, but those working hard against all odds to provide jobs and create economic value should not be painted in the same tar.
We suggest that the deregulation policy of the government should be fully implemented, starting with an elaborate definition and development of the legal framework to guide it. The reform and renewal process must ensure true value-creation for the Nigerian people and weeding out of the system leeches.