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.
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