FUEL PRICES in Nigeria went up an average 40 percent within days of the United States (US) and Israel attacking Iran. Diesel prices went up 50 percent. This development shot up prices of transportation, and more Nigerians who cannot afford the price hike took to trekking.
Mr. Peter Obi, former Anambra State governor, lamented the plight of Nigerians and the devastating effects on industry caused by recurring fuel price hikes. He argued that these rapid increases illustrate how vulnerable to external shocks the country’s economy is, and how quickly we are impacted by foreign events.
Then, the Tinubu Presidency, like an educated illiterate who, while making claims to some scholarship, is incapable of basic reflection, gives the impression that it is the citadel of knowledge. It told Obi: “Sometimes the wiser thing to do is simply sit a conversation out when one does not fully understand how the system works rather than jumping at every opportunity to malign Nigeria, as this has been your modus operandi. It would save both the country and the speaker from unnecessary embarrassment.”
In his analysis: “The reason for this is straightforward: most countries, whether they are oil-producing or non-oil-producing, maintain strategic petroleum reserves to cushion against supply or price shocks. This means that when there is a disruption in the global oil market, they can release part of these reserves to stabilise supply. However, Nigeria lacks such a buffer, so the impact is felt almost immediately.”
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In his view, countries that plan build mechanisms to absorb shock when there are global disruptions, but that those who fail to plan become vulnerable. He submitted thus: “The old maxim remains true: when a country fails to plan, it has already planned to fail.”
Now, this is how civilised debate is conducted. No insults, no attacks on persons. Obi simply makes his points and leaves those who agree or disagree to also express their opinions. This is how society can develop.
But the Tinubu administration turned this civilised way of discussing serious national issues into a typical Lagos motor park response culture in which touts insult, shout at each other and often resort to violence.
The Tinubu Presidency said: “When someone who once held the office of governor begins to make such sweeping conclusions about a complex global energy market, it is frankly embarrassing.”
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I do not see Obi’s advice that Nigeria plans against external shocks as “sweeping conclusions” and I see nothing embarrassing in it. Rather, as a Nigerian, I am ashamed that the Presidency cannot carry out straight forward debates in a manner befitting of a country that has had universities for about eight decades.
The Presidency went on in its insults: “A former governor should know better than to reduce a multi-layered economic issue to a simplistic talking point.” This mystification of economics and reduction of serious matters that border on the well-being of the people to crass propaganda is one of the reasons we are not developing as a country.
Then, the Tinubu Presidency, like an educated illiterate who, while making claims to some scholarship, is incapable of basic reflection, gives the impression that it is the citadel of knowledge. It told Obi: “Sometimes the wiser thing to do is simply sit a conversation out when one does not fully understand how the system works rather than jumping at every opportunity to malign Nigeria, as this has been your modus operandi. It would save both the country and the speaker from unnecessary embarrassment.”
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So, how can any government with some gumption conclude that Obi, by pointing out what he sees as flaws in our system and making suggestions on how we can overcome them, conclude that he is maligning the country? Incredible! How has our governance degenerated so badly that some of those who speak for the Presidency seem to be some lumpen proletariat picked from the dregs of society?
After stripping the Presidency’s reaction of its insults and illogical conclusions, let us examine its basic submissions on the issues in contention.
It claimed that: “The recent rise in fuel prices in Nigeria is not primarily because the country lacks a strategic petroleum reserve. The more immediate factor is that the fuel market is now largely deregulated following the subsidy removal by the administration of Bola Ahmed Tinubu.”
Government, in claiming to educate, pontificated that: “In a deregulated system, petrol prices respond directly to global oil prices, exchange rates, shipping costs, and supply risks.” Good, in a sane clime should these apply to an oil-producing country? No! Such a country does not need to buy crude at global prices, requires no exchange rate, eliminates shipping costs, and supply risks are virtually absent. So, if we have a government that plans, none of these should apply to us.
Here, the government presents deregulation as a religion from which any deviation is a sin. The basic issue is that fuel is too important in the lives of the people and the survival of the economy to be left absolutely in the hands of market forces. No country, including the US, seen as the archangel of deregulation, does that; all countries put their citizens’ interest first.
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The Constitution says the essence of government is the security and welfare of the citizenry. So, any government that cannot make this a priority over any policy, should not retain the mandate of the people. What manner of deregulation negates the fact that we produce crude oil in abundance and do not need to freight it for local refinery? What Obi is saying basically, is that Nigeria, given its resources, including abundant crude oil, should build a system that can withstand basic shocks in oil supply.
What we have in place is basically a cartel in the oil industry dictating prices. It is one in which if Dangote people wake up in the morning and feel like changing the price of fuel, can do so as if we do not have a government. This is basic monopoly which no government with its head on its shoulders should accept.
This is what Adam Smith, the father of capitalism, warned against when he posited that: “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow citizens.”
Government, in claiming to educate, pontificated that: “In a deregulated system, petrol prices respond directly to global oil prices, exchange rates, shipping costs, and supply risks.” Good, in a sane clime should these apply to an oil-producing country? No! Such a country does not need to buy crude at global prices, requires no exchange rate, eliminates shipping costs, and supply risks are virtually absent. So, if we have a government that plans, none of these should apply to us.
This truth negates the Tinubu administration’s eclectic deposition that when international tensions rise, “countries that rely heavily on imported refined products like Nigeria will inevitably feel the effect at the pump.” On the other hand, it reinforces Obi’s argument that Nigeria has failed to plan. What is, therefore, needed is planning, to shield us from global shocks and make us independent of imported refined products. This is how the educated and patriotic mind works.
I agree with the Presidency’s submission that: “Even countries with very large reserves, such as the United States and China, maintain them primarily for serious supply emergencies, wars, embargoes, or major disruptions to global supply chains.” This is our own emergency.
