For close two decades now, successive Nigerian governments have been trying to remove the subsidy paid on the use of petrol by citizens.
None has been able to muster the political will to do so.
There is a reason for that.
The economic reasoning for remove the subsidy had been laid down time and again.
Quite alright, this government even from inception and due to the outbreak of the coronavirus, has seen its revenue collapse after dramatic falls in the price of crude oil, and if the government cannot raise revenue to provide the most basic of services, there will be no state govern.
In a democracy, where political parties always have to go back to the populace in search of a governing mandate, removing the subsidy also has political implications. ]
The opposition People’s Democratic Party (PDP), which fought strenuously to remove the subsidy while it was in government is now up in arms against it.
Then there is the security implication for removing the oil subsidy.
There is no reason not to think that the government has weighed all the pros and cons of this latest action and the president has been thoroughly briefed on the worst case scenario by his national security team.
But that is if the government can actually stay the course, regardless of how high the price of crude rises in the international market.
Very quietly, and maybe even efficiently, the Minister Finance, Zainab Ahmed, has succeeded in taking control of the Nigerian economy, which in the past, many analyst felt was rudderless, and set it in the direction she believes will be more sustainable.
Central to her argument has been the inability of the government to raise enough revenue to meet its obligations. ‘
That has seen the government borrow endlessly to the extent that most of the revenue generated is spent on debt servicing.
To be fair to the minister, she has not failed to respond.
The government has raised the Valued Added Tax (VAT) on luxury item from five per cent to 7.5 per cent.
And even in the middle of a pandemic, it has now doubled the cost of electricity and is pushing ahead with plans to completely deregulate the downstream oil sector and let market forces determine the price of petroleum products.
The policy change has made the Petroleum Products Pricing Regulatory Agency (PPPRA), which periodically published price templates for the profit margins of marketers and retail cost for consumers, redundant
Sometime in April, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari explained on television that the government would no longer be paying subsidy on petrol.
Since then, the pump price of petrol has been fluctuating, going up or down; but mostly up depending on the price of crude oil in the international market.
The policy change has made the Petroleum Products Pricing Regulatory Agency (PPPRA), which periodically published price templates for the profit margins of marketers and retail cost for consumers, redundant.
The plan, apparently is to merge the PPPRA with the Petroleum Equalisation Fund, another government agency.
Petrol is now selling just below N160 per litre in most retail outlets.
At the international market, the price of Nigeria crude is about $42 per barrel.
It is easy to say that the downstream sector has been deregulated.
And another N10 or N20 rise in the pump price can easily be managed.
But once it starts getting to N200 per litre, political pressure will start to build and the failure will be from the President Muhammadu Buhari’s economic advisers.
They have done what they believe is right.
The question will be on what his security advisers are telling him.
Unless there is a major incident in the Middle East or the South China, it least unlikely that there will be a sudden rise in the price of crude.
But then, it is still not unthinkable for crude oil prices to reach $100 per barrel or even get close $150 per barrel.
Will the Nigerian government be able to handle the political pressure, social unrest and misery of an already impoverished populace and allow the pump price of petrol to rise to as much as N450 per litre?
Even without saying it, it will be clear that any political party that goes through with such a policy will likely not win any election in Nigeria for a long time to come.
But it isn’t just the voice of security experts that need to be heard.
Will the Nigerian government be able to handle the political pressure, social unrest and misery of an already impoverished populace and allow the pump price of petrol to rise to as much as N450 per litre?
Labour unions are meant to fight for the welfare of people. At every stage, they are meant to be debating policy with government and even at critical times, stand against the government.
That is not happening.
It can almost be argued that Labour in Nigeria has become a toothless bulldog.
Maybe it is the laws, maybe it has to do with their leaders, but there is no doubt that labour activism is dying.
The movements need to look within to change.
When labour unions cannot adapt to the changing nature of the workforce, structure of any economy, they tend to fade away.
Once upon a time, the government could not make any major policy change without consulting the country’s biggest labour unions.
Even at the height of military rule, they were a force to reckoned with.
These days, they are rarely invited to the table to talk policy.
At least in Nigeria, only two issues consistently galvanise the Nigeria Labour Congress (NLC) and its affiliate groups to act.
That is workers’ pay or the minimum wage, and the price of Petroleum Motor Spirit (PMS).
News flash for the NLC, the pay rise it recently negotiated with the government have all been eroded by inflation and the fall in the value of the naira, all because they have shown little interest in government borrowing and the ability of the government to raise revenue and spend wisely.
Of course, there was a time NUPENG was so resilient, it was a thorn in the flesh of General Sani Abacha, who was reluctant to put the country on the path of democratic rule.
ASUU has gone on strike so many times, never thinking beyond issues of welfare, it hard to say whether it is still effective as an association and pressure group.
To some extent, they have so abused the right to go on strike so that Nigerians and even students whose lives are directly affected by it have become numb to it.
The academic curriculum or the growth of research capabilities have never been on their list of priorities.
There is a long list of professional associations and unions, from the Nigerian Medical Association (NMA) to even the Nigerian Bar Association (NBA) that appear incapable of adapting to the changing times.
The unions are meant to be a means to an end.
But for many who lead these associations today, just being part of them is end in itself.
