Fuel subsidy: The cabal’s strategies, tactics (1)

Oil prices drop on chinese, US data. PHOTO: www.brecorder.com

Oil prices drop on chinese, US data. PHOTO: www.brecorder.com

“If we don’t kill corruption, corruption will kill Nigeria”. – President Muhammadu Buhari, 2015

THE fuel subsidy struggle in Nigeria has entered a critical phase. The cabal and its agents are agitating for President Buhari to increase fuel prices under the guise of removing “fuel subsidy”.

There is no subsidy on fuel prices in Nigeria. What exists is the corrupt misappropriation of public funds by a cabal through the criminal manipulation of our inefficient domestic oil sector.

The cabal took $2.59 billion (2009), $4.42 billion (2010) $12.11 billion (2011) and $8.63 billion (2012) from the public pursue through corrupt means. The theft continued in 2013-15. The Nigerian masses are fighting to stop this corruption and the cabal is fighting back.

We will carry out a political analysis of the fuel subsidy struggles with special emphasis on the strategies and tactics of the cabal. Let us begin by identifying the cabal. What exactly is the Nigerian cabal? The Nigerian cabal is the leadership of the Nigerian ruling class.

This is how President Olusegun Obasanjo explained the constituent parts of the cabal. “When we made our first contact with the merchant adventurers from Western Europe, most of our shores became trading posts where primary products were exchanged for processed goods.

I would like to suggest that the modifications and complications of modern economic organization and exchange apart, our uneven relationship with Europe and now including North America remain basically unchanged. We continue to be trading posts, which supply primary products in exchange for processed goods.

The existence of import substitution does not detract from this fact. The trading posts are run and maintained by our citizens. These can be grouped into four (a) intellectual (b) commercial (c) bureaucratic (d) Technical.

The activities of these agents constitute impediment to Black African development.”– General Olusegun Obasanjo, FESTAC, 1978. Today, in 2015, we produce crude oil and import petroleum products. We remain a neocolonial trading post for global capital.

The fundamental economic/political/social relations of Nigeria are relations of underdevelopment designed to reproduce the nation on an expanded scale as a trading post.

These power relations are managed by a regressive anti-development native ruling class whose primal function is the looting of the public treasury.

The leadership of this indigenous ruling class makes up the cabal. The cabal uses “fuel subsidy” to justify the looting of the public treasury and then pass the cost to the Nigerian masses by increasing fuel prices.

The intellectual, commercial, bureaucratic and technical groups under the cabal all play their part in this corrupt process. They are supported by the IMF/World Bank and other institutions of global foreign capital.

The NNPC is allocated 445000 barrels per day for our four refineries to meet Nigeria’s local demand for petroleum products. The cabal sabotaged our domestic refining capacity with inefficient Turn-Around-Maintenance and took control of petroleum products importation, processing and payment.

In 2011, President Buhari explained the process thus: “So all these people talking about subsidy, who is subsidizing who?… Because of corruption, they have virtually allowed all the refineries to become so inefficient that I do not think they produce at half their capacities; and the people say they are subsidizing.

Who are they subsidizing?… Even if you are taking 250000 barrels per day to be refined outside; all you have to do is to pay the fees for this refining and you bring your own oil and sell it; and people say they are subsidizing… It is sheer fraud and corruption”.

General Muhammadu Buhari (rtd), 2011 The cabal was not happy with General Buhari’s comments. The FGN was planning for a hike in fuel prices due to intense pressure from the IMF/World Bank at the end of 2011. In January 2012, the FGN increased PMS prices from N65/litre to N140/litre.

The Nigerian masses exploded and fought back. They brought the nation to a halt and took control of the streets. The cabal unleashes the coercive arm of the state.

The police killed young national heroes like Ademola Aderinto (Ogba, Lagos), Olurin Olateju (Ibadan), Muyideen Mustafa (Ilorin), Abdul Gafa (Kaduna), Mohammed Hadis (Kaduna), Rabui Abubakar (Suleja) and many others in the streets of Lokoja, Jalingo, Kano, Maiduguri, Ibafo and Lambata. This did not stop the anti-subsidy struggle.

It took the Nigerian Armed Forces and the capitulation of the labour union leaders to force the Nigerian masses back into their homes, offices, factories, schools, markets and farms.

The FGN reduced the PMS prices from N140/litre to N97/litre. This was a partial defeat for the cabal. Despite the partial defeat, the cabal continued the looting of the public treasury under the myth of a “fuel subsidy” in 2012-2014.

The CBN Governor, Sanusi Lamido Sanusi, was worried. He blew the whistle and demanded an explanation for $20 billion not deposited in the Federation Account. “I am convinced that a major source of revenue leakage from the system is NNPC’s unverified claims for subsidy and unilateral deductions from the Federal Account,” said Sanusi.

The cabal was in a tight spot. The FGN brought in PWC to white wash Sanusi’s claims with a forensic audit that did not meet the most basic rudimentary international audit standards.

The FGN called on the IMF/World Bank for help. The IMF advised the FGN to prepare for a fuel price increase after the 2015 elections.

Hence, no “Subsidy funds” were budgeted for PMS/kerosene imports after May 2015. They assumed that the Jonathan government would be re-elected and prepared for a major conflict with the Nigerian masses in June-July 2015.

The Nigerian masses exposed this IMF/World Bank inspired plan. Mass agitation commenced thereby forcing the FGN to reduce PMS price to N87/litre. The masses were not finished. • To be continued tomorrow. • Dr. Agbon, a Petroleum Technology expert, lives in Texas, United States of America.

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  • Segun Badmus

    Nice expose….I am looking out for the continuation tomorrow

  • emmanuel kalu

    I seriously don’t understand what this writer is getting to. yes we know that the cabal are looting the country via the subsidy. so that means the subsidy has to be cleaned up or ended. This is the way the subsidy works. The official PMS price is N87. the cabal say the actual cost is N140. That means we are paying N53 as subsidy. now if we don’t end it completely, the best option to reduce the cost would be to increase the fuel prices to what the people are already paying N100-120. this would reduce the subsidy cost to between N40-20. To completely remove corruption, i believe subsidy imported fuel should be done by very few companies, by 3-5. they would be easier to monitor and control. these days we have close to 40 marketers, nobody knows the actual cost , who is doing what, when fuel is imported. simply the process. fuel importation is to be done during this month, for this amount of fuel, by this five companies.

  • TAJ

    This is a very poor quality write up by the guardian. It is fit only for junk magazines. I’m thoroughly disappointed. I expected a detailed analysis with facts and figures but it looks more like an APC campaign material. What a shame Guardian.

    The solution to subsidy is to get the local refineries working and build more refineries. Have a Zero export policy for crude oil. Use all the energy to fuel Nigeria’s industrial revolution. This is a hard pill to swallow for the thieving political elite including the semi-senile old man in Aso rock. Niger Delta oil is too sweet for them to leave.