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The Ultimate State of Emergency

This Day (Lagos)
OPINION
June 25, 2004
Posted to the web June 25, 2004

By Udochi Nwaodu
Lagos
The hot national issue since May 18, 2004 is the state of emergency declared by
President Olusegun Obasanjo on Plateau State as a result of the recurring
religious/ethnic unrests at Yelwa in Shendam local government area of the
state. Among the reasons for Mr. President's action was the perceived
immaturity, biased and casual handling of the situation by the state governor,
Mr. Joshua Dariye. The governor was accused of not doing enough to prevent or
stop the wanton killings and destructions in his state. He was said to be busy
overseas reconciling his fat bank account statement while his state burned. He
probably would have relied absolutely on CNN network to obtain updates of
happenings in his own state while his journey lasted.
The governor's overseas trip which coincided with the period shortly after
receiving the federal allocations for the month of April justified the comment
by the Minister of State in the Finance Ministry, Mrs. Nenedi Usman. The
honorable minister had accused governors of doing nothing for their states
except to await the monthly federal allocations which they promptly looted and
shipped overseas. This accusation no doubt, drew the ire of state governors who
lamented that the statement was not only unguarded but largely loose and
unsubstantiated.
Well, the import of this write up is not to join issues with anybody over who
was right and who was wrong. But if the witch cried last night and the child
died this morning, one may be tempted to hold the witch responsible for the
death of the child. So, if Plateau State Governor received his state's federal
allocation, FAAC, this week and the next week he is away overseas, even at the
risk of not informing Mr. President, then the Minister may not be completely
shunned.
However, the issue of state of emergency has generated immense debate and
argument as to the propriety or otherwise of the President's action.
Nevertheless, it is only an irresponsible government that will fold its hands
and watch as such barbaric and senseless genocide goes on in the land. The
events subsequent to May 18 declaration of state of emergency in Plateau State
have proved that the President could not have waited a day longer. Apart from
sending the right messages to other restive states like Delta and Kano, the
declaration marked a turning point from the kid-glove treatment of uprisings in
the country. Before now, the federal government had merely sent peace-keeping
forces to troubled areas of the country. At times the peace keepers get killed
in their tens and little or nothing happens afterwards. Not anymore!
Nevertheless, the ultimate state of emergency has not been declared! That
emergency is in the nation's petroleum industry. The Yelwa - Shendam uprising
will be a child's play compared to the energy crises rocking the nation at the
moment. It is ironical that Nigeria as a major oil-producing and exporting
country should be engrossed in such a magnitude of problems in the energy
sector. It is equally embarrassing that its four refineries are not producing
enough to satisfy local consumption in spite of the huge foreign exchange
pumped into them annually. The sad thing is that the country has to rely
largely on imported fuel for its sustenance. It is therefore totally
unacceptable to align the local prices of petroleum products to the vagaries of
importation. It is the height of irresponsibility on the part of the managers
of our economy to subject the citizenry to untold hardship at a time government
was making a kill in its oil export earnings. The government owes the populace
the moral duty to enable them enjoy the natural resources which God in His
infinite mercy has so generously endowed on us by making the end products of
crude oil affordable by all and sundry.
The NLC's response to the petroleum prices increase resulting in a suspended
three-day strike was not only commendable but the only source of hope for the
generality of the down-trodden masses. Without the courage of NLC in
challenging arbitrary increases in the prices of petroleum products the
government through the major marketers would have placed the price far above
the reach of the average Nigerian. The consequent artificial scarcity of the
products is only an arm-twisting strategy by the major marketers to return to
the unholy high prices. All these factors underscore the need to declare a
state of emergency in the energy sector.
Pricing of petroleum products has had a chequered history in this country.
Since the early eighties when petrol sold for about 20k a litre to date when
the price has soured to about N50 a litre in Lagos area (the price goes as high
as N80 in the East), fuel subsidy removal has been played like a joker in the
game plan of government officials each time they wanted to raise more money
from fuel prices. Unfortunately, petroleum price increase has not solved any
body's problem. Rather it worsened it.
What has repeatedly played out each time there is an increase in price was a
vicious cycle - government felt it was subsidizing fuel prices; it raises their
prices by purportedly removing the subsidy; transporters respond by hiking
transport fares; general price levels go up; income of workers are devalued due
to the resulting inflation; workers demand more pay to match sky rocketing
prices; government then requires more money to meet the demand in wages and
therefore further raises prices of its only major source of revenue, and the
cycle is played all over again. The gains of a particular regime of price
increase are thus crowded out by the reactions of economic variables.
At the international scene another round of vicious cycle also plays itself
out. Economic unrests in Nigeria influences international oil prices, leading
to higher revenues to government, but equally higher cost of importing
processed fuels. This puts pressure on the government to raise prices to
recover the marginal increase in the landed cost of imported fuel, an action
that triggers off another round of unrests, revenue losses, international oil
price increases, and all the other chains in the cycle.
There is clearly a state of emergency in the energy sector! Virtually all the
strike actions by the Nigerian Labour Congress, NLC, since the inception of the
Fourth Republic of President Olusegun Obasanjo had been reactions to petroleum
price increases. It is inconceivable the amount of revenue the government and
private sector lose as a result of strike action by workers. The last three-day
strike action of June 9 to 11, 2004 was said to have cost the country about N51
billion in lost revenues. Since May 29, l999 when this regime took over the
reins of government, the country has lost over 30 days to strike actions
resulting from fuel price hikes. If we assume that the estimated loss of
revenue to the nation in three days was N51 billion, then Nigeria would have
lost over N510 billion (or $3.8 billion) in the last five years to fuel strike
alone! This is an amount that could deliver more than two brand new refineries
to the country and thus end the over reliance on imported fuel.
This loss is apart from huge human and material losses in the course of
prosecuting the strike action. Some of the strike actions had resulted in
bloody and fatal confrontation between the protesters and law enforcement
agents. While the exact number of lives lost to fuel-price related strikes may
not be known, the estimate will surely be mind-boggling. Thousands of people
have also died across the nation while scooping petrol from burst NNPC pipes.
This was because trading in petroleum products even from broken product pipes,
was big business.
Energy crises are at the root of the country's problems because any increase in
fuel price automatically affects transportation cost which immediately impacts
on food prices. Due to high poverty level in the country high prices of food
items lead to higher poverty indices, increase in armed robbery and other
social problems with it. Even religious and ethnic crises in the country cannot
be unconnected to poverty induced by high prices of food items.
Unfortunately, no previous regime has been able to get it right. From the days
when the country's problem was how to spend the stupendous oil incomes to the
present situation when the masses are ready to take up arms against further
increases in the price of petroleum products, there has not been a conscious
strategy to address the fundamental issues in the energy sector. In spite of
the huge petro- dollar earnings, adequate measures have not been taken to
ensure steady and uninterrupted supply of the products for local consumption.
Is it not time to set up more refineries or upgrade existing ones to increase
domestic production of petroleum products? President Obasanjo must declare a
state of emergency in the petroleum sector now.

   

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