There’s no subsidy on fuel – David-West
From YINKA FABOWALE, Ibadan
Saturday October 15, 2011
Prof Tam David West
Photo: Sun News Publishing
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Former Petroleum Minister, Prof-Tam David West, has warned the Federal Government to back out of the plan to remove petroleum subsidy.
According to him, government would be courting instability of a grave dimension, if it goes ahead with the controversial move, which he said is sure to overburden Nigerians already suffering harsh economic adversities.
David West, who served as oil minister in the Gen. Muhammadu Buhari regime, in the 1980s, dismissed official claim of an oil subsidy, accusing the Federal Government of angling to satisfy “the suicidal conditionality of the International Monetary Fund (IMF) and World Bank, at the expense of its moral and humanistic obligation to its citizenry.”
He observed that the commoners, who had been at the receiving end of the mismanagement of oil operations, would suffer.
On what to expect if the government goes ahead with the plan, David-West said: “It is courting instability and crisis that can cascade into conflagration, because if there is no justice, there can’t be peace.”
The former minister took a swipe at the leadership of labour, accusing them of compromise and sell-out, which he blamed, for what he called the authorities’ disregard for the feelings of the people.
The Federal Government is planning to remove fuel subsidy. As somebody who was involved in oil business as minister, what do you think?
What the NNPC and government have been doing is a scare strategy. They try to scare the public that if you don’t remove subsidy, the economy would collapse. It’s all orchestrated lies. Why? Because, they’ve not been able to justify their statistics. They bring prices of fuel in different parts of the world, both OPEC and non-OPEC, showing that Nigeria’s is the least. But I counter that argument that you can’t talk about this, without talking, comparatively, about the Gross Domestic Product, the standard of living, the wage system in the countries. In virtually all of these countries, the national minimum salaries are between 20 and 100 per cent higher than what you have in Nigeria. The state of their infrastructure is excellent. Schools in some of these countries are free. So, you can’t use that to judge. It’s not valid.
What will then be your advice?
Governance is not simply about Naira and Kobo. There is moral and humanistic philosophy in governance. A government must ask: Are my citizens happy? Have I provided enough to make them comfortable? Unfortunately, people in government are those who put burden on the populace and in all countries, the masses, the relatively deprived masses, in terms of social amenities, are more than the privileged. They are preponderantly at the base of what I call the social pyramid. So, government should be interested.
Edmund Burke said: ‘Government is a contrivance of human wisdom to provide for human wants.’ Premised on this, any government that cannot make its people comfortable is irrelevant. None of the persons in government buys petrol for himself. Their cars are fuelled at public expense. Why must you then make policy that would punish the poor man, who is already suffering? I tell you this country will collapse if this government increases the pump price of fuel by 200 per cent, as it’s planning. They should be careful. The country can collapse if people are pushed to the point of desperation, because if you increase, it’ll have spiral effects on costs of food, rent, transportation and other essential amenities. Living only has meaning when people feel it is better than dying. When a person perceives there is no difference between living and dying, he’ll not fear to do anything, even if he dies.
In 1996, I wrote that a few selfish Nigerians sabotaged our refineries so they can continue to import fuel. This theory has been confirmed by Aret Adams, a former GMD of NNPC. Ask yourself who are gaining from fuel importation? Wealthy people. I’d challenged the NNPC and government more than 17 years ago to publish the list of names of fuel importers; they’ve not done so, because the county will go on fire. We were not importing during Buhari’s time. We were exporting. Soon after Buhari, we started importing fuel, why? Lack of patriotism, empathy and greed. During Buhari’s regime, we were operating three refineries, and exporting; now, we have four and we are importing. The total capacity of the refineries, if they are all working properly, is 445,000 barrels per day. In 1995, NNPC imported fuel worth $800 million, yet the Minister of Petroleum, Dan Etete said they needed just $250 million to revive and perfect the operation of the refineries.
How come government could not appropriate the $250 million and fix the refineries?
Is there actually fuel subsidy?
There is no fuel subsidy. It’s all fraud. The finance minister was recently quoted as saying that there is subsidy, but that it does not go to the common people. That argument is convoluted. It’s intrinsically contradictory. NNPC said if it (removal) were not done in 1995, the economy would collapse. This is 2011, it has not and we’re all still here. They promised fuel importation would stop in 2000. This is 2011, it is still in full throttle; you see how unserious they can be? Subsidy removal is IMF/World Bank dangerous suicidal conditionality for oil producing countries. The minister of finance is hand in glove with them. She should not bring their script.
How then do we handle IMF/World Bank?
Government could easily call the bluff of the Bretton Woods financial institutions for economic recovery and development by having the international customers for the nation’s major foreign exchange earner (oil) pay in advance for guaranteed supply of crude over time. This prepayment strategy, which the Buhari regime adopted, made IMF irrelevant to the economic management at that time.
How would you assess the reaction of trade congresses in the face of fuel subsidy removal?
Why government is getting away with all these things is that labour leaders have compromised and have become ineffective. The Nigeria Labour Congress (NLC) threatened, in March, that ‘no minimum wage, no election’, only to back down when government talked to its leaders and made an empty promise, which it reneged upon. If they had put their feet down then, we won’t be going through this backsliding. We knew of Imoudu’s congress. It not only barked, it bit, and that’s why the man remained a hero till today. In the country, we’ve seen Aba women riot force a bad policy down. Today, we are saddled with lame duck labour.
What’s the way out?
If they agreed on a particular pump price for petrol, it will go down well with the public. There’ll be no convulsion, because it will be credible.
From YINKA FABOWALE, Ibadan
Saturday October 15, 2011
Prof Tam David West
Photo: Sun News Publishing
More Stories on This Section
Former Petroleum Minister, Prof-Tam David West, has warned the Federal Government to back out of the plan to remove petroleum subsidy.
According to him, government would be courting instability of a grave dimension, if it goes ahead with the controversial move, which he said is sure to overburden Nigerians already suffering harsh economic adversities.
David West, who served as oil minister in the Gen. Muhammadu Buhari regime, in the 1980s, dismissed official claim of an oil subsidy, accusing the Federal Government of angling to satisfy “the suicidal conditionality of the International Monetary Fund (IMF) and World Bank, at the expense of its moral and humanistic obligation to its citizenry.”
He observed that the commoners, who had been at the receiving end of the mismanagement of oil operations, would suffer.
On what to expect if the government goes ahead with the plan, David-West said: “It is courting instability and crisis that can cascade into conflagration, because if there is no justice, there can’t be peace.”
The former minister took a swipe at the leadership of labour, accusing them of compromise and sell-out, which he blamed, for what he called the authorities’ disregard for the feelings of the people.
The Federal Government is planning to remove fuel subsidy. As somebody who was involved in oil business as minister, what do you think?
What the NNPC and government have been doing is a scare strategy. They try to scare the public that if you don’t remove subsidy, the economy would collapse. It’s all orchestrated lies. Why? Because, they’ve not been able to justify their statistics. They bring prices of fuel in different parts of the world, both OPEC and non-OPEC, showing that Nigeria’s is the least. But I counter that argument that you can’t talk about this, without talking, comparatively, about the Gross Domestic Product, the standard of living, the wage system in the countries. In virtually all of these countries, the national minimum salaries are between 20 and 100 per cent higher than what you have in Nigeria. The state of their infrastructure is excellent. Schools in some of these countries are free. So, you can’t use that to judge. It’s not valid.
What will then be your advice?
Governance is not simply about Naira and Kobo. There is moral and humanistic philosophy in governance. A government must ask: Are my citizens happy? Have I provided enough to make them comfortable? Unfortunately, people in government are those who put burden on the populace and in all countries, the masses, the relatively deprived masses, in terms of social amenities, are more than the privileged. They are preponderantly at the base of what I call the social pyramid. So, government should be interested.
Edmund Burke said: ‘Government is a contrivance of human wisdom to provide for human wants.’ Premised on this, any government that cannot make its people comfortable is irrelevant. None of the persons in government buys petrol for himself. Their cars are fuelled at public expense. Why must you then make policy that would punish the poor man, who is already suffering? I tell you this country will collapse if this government increases the pump price of fuel by 200 per cent, as it’s planning. They should be careful. The country can collapse if people are pushed to the point of desperation, because if you increase, it’ll have spiral effects on costs of food, rent, transportation and other essential amenities. Living only has meaning when people feel it is better than dying. When a person perceives there is no difference between living and dying, he’ll not fear to do anything, even if he dies.
In 1996, I wrote that a few selfish Nigerians sabotaged our refineries so they can continue to import fuel. This theory has been confirmed by Aret Adams, a former GMD of NNPC. Ask yourself who are gaining from fuel importation? Wealthy people. I’d challenged the NNPC and government more than 17 years ago to publish the list of names of fuel importers; they’ve not done so, because the county will go on fire. We were not importing during Buhari’s time. We were exporting. Soon after Buhari, we started importing fuel, why? Lack of patriotism, empathy and greed. During Buhari’s regime, we were operating three refineries, and exporting; now, we have four and we are importing. The total capacity of the refineries, if they are all working properly, is 445,000 barrels per day. In 1995, NNPC imported fuel worth $800 million, yet the Minister of Petroleum, Dan Etete said they needed just $250 million to revive and perfect the operation of the refineries.
How come government could not appropriate the $250 million and fix the refineries?
Is there actually fuel subsidy?
There is no fuel subsidy. It’s all fraud. The finance minister was recently quoted as saying that there is subsidy, but that it does not go to the common people. That argument is convoluted. It’s intrinsically contradictory. NNPC said if it (removal) were not done in 1995, the economy would collapse. This is 2011, it has not and we’re all still here. They promised fuel importation would stop in 2000. This is 2011, it is still in full throttle; you see how unserious they can be? Subsidy removal is IMF/World Bank dangerous suicidal conditionality for oil producing countries. The minister of finance is hand in glove with them. She should not bring their script.
How then do we handle IMF/World Bank?
Government could easily call the bluff of the Bretton Woods financial institutions for economic recovery and development by having the international customers for the nation’s major foreign exchange earner (oil) pay in advance for guaranteed supply of crude over time. This prepayment strategy, which the Buhari regime adopted, made IMF irrelevant to the economic management at that time.
How would you assess the reaction of trade congresses in the face of fuel subsidy removal?
Why government is getting away with all these things is that labour leaders have compromised and have become ineffective. The Nigeria Labour Congress (NLC) threatened, in March, that ‘no minimum wage, no election’, only to back down when government talked to its leaders and made an empty promise, which it reneged upon. If they had put their feet down then, we won’t be going through this backsliding. We knew of Imoudu’s congress. It not only barked, it bit, and that’s why the man remained a hero till today. In the country, we’ve seen Aba women riot force a bad policy down. Today, we are saddled with lame duck labour.
What’s the way out?
If they agreed on a particular pump price for petrol, it will go down well with the public. There’ll be no convulsion, because it will be credible.
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