“Subsidy is a massive scam that impoverished the poor, enriched the Independent Marketers and their front men.”
This argument that subsidy benefits the poor is based on a faulty premise and truly doesn’t worth the space it is typed on, any space that is. The subsidy regime as has been applied in Nigeria has been one massive scam that has benefited the super-rich and impoverished the poor.
Petroleum subsidy in Nigeria is far more injurious to the average Nigerian than all the military coups, civil war, insurgency, and banditry combined. Here’s why.
Federal Government paid the independent marketers in excess of N8 trillion in 5 years as subsidy for ‘importing’ finished petroleum products into Nigeria
As a result of this importation, the independent marketers collude with NNPC top guns to sabotage the four Refineries and stop them from performing optimally because if the refineries can get to even 30% performance capacity, there will be no need to import finished products in the first place.
Secondly, the Federal Government of Nigeria has spent almost N7 trillion on Turn Around Maintenance (TAM) on the refineries over 8 years but again sabotaged by the same independent marketers.
Thirdly independent marketers claim more than six times the value of the actual volume of products imported and get the difference between the landing cost of the product and the pump price.
Fourthly, despite being paid the difference between the landing cost and the pump price as subsidy, these rogue independent marketers will still divert the products to neighbouring African nations and sell these products at four times the price sold in the local markets. So, at the end of the day, the Federal Government of Nigeria pays subsidy to the whole of Africa. That is the madness.
This has been going on for over 20 years now.
This is why the Petroleum Industry Act (PIA) was enacted to cure and the subsidy regime is effectively coming into effect on June 30th because, in the 2023 Appropriation Act, there is no provision for subsidy beyond June.
Nkereuwem Akpan, Esq. is an Abuja lawyer.
