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Nigeria: Deregulation equals death! Socialism only way out! Oppose fuel price increases!

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Nigeria is an oil-rich country and yet its people live in absolute poverty. A small privileged elite profits from the oil industry, stashing away their ill-gotten gains and do not use this oil wealth to improve living conditions for the masses. Now they want to worsen things with deregulation. The only answer is nationalisation and planning of the resources under workers' control.

It has been said that it is a form of mental degenerate disorder to keep on doing the same thing over and over again and expecting a different result each time. This is the case with the Nigerian capitalist class who have over the past 23 years followed loyally the anti-people dictates of their imperialist masters.

Oil pipes in NigeriaThe result of the imposition of all these anti-people (mis)policies has been devastating on the masses. It has been misery without end - poverty, disease, unemployment, homelessness, etc. There has been no time in history where things have been this terrible for the masses. Yet the Nigerian ruling bourgeois elite through its government keeps on talking about continuing with more attacks on the masses.

What is most mentally irritating is the fact that they use the same old arguments. This shows the extent of the degeneration of the Nigerian ruling elite and a further confirmation that this class of people must be overthrown by the working masses. If the Nigerian ruling class is not overthrown they will destroy this society.

Again we are back to the "good old days" where fuel scarcity reigns and we are gradually losing count of the number of times fuel prices have been increased. The prices of kerosene diesel, aviation fuel, etc, have been deregulated.

In February, the Yar'Adua regime reduced the price of petrol to N65 and declared that the downstream of the oil sector would be deregulated as of March. We said then that it was a trick to prepare the ground for a major assault on the masses. The leadership of the oil workers, NUPENG and PENGASSAN, also declared that this was deregulation via the back door.

Fuel Price Table
Country Price
Nigeria
N65.00 (above)
Algeria
N49.30
Iran & Iraq
N4.50
Kuwait
N34.80
Libya
N20.30
Quatar
N31.90
South Africa
N23.20
Venezuela
N2.20

 

No Subsidy on Fuel in Nigeria!

As stated earlier, the arguments for fuel price increase have remained the same for the past 23 years. The Yar'Adua regime has added no new innovation. It is the same old juggling of unreal figures and coming to a new price. The price of petrol has been increased over ten times: where then is the subsidy?

However, the new angle of attack which the Yar'dua administration wants to add is the total deregulation of the sector, particularly the pricing of petrol. A situation of total disorder where the pricing of petrol would be determined at will by the big marketers, owners of petrol stations and the black marketers. In short, the laws of the jungle are to reign supreme.

The arguments of subsidy are just an aside to carry out the regime's sinister attack. From available data, fuel costs more in Nigeria than in other OPEC countries. Fuel is even more expensive in Nigeria than in many non-oil producing nations such as South Africa. Some of these countries also import fuel.

Prior to now, the government normally said that fuel was cheapest in Nigeria in order to increase prices. They quote figures showing fuel prices in other countries; this practice has stopped as the table has turned against them. Fuel in Nigeria is now more expensive.

Secondly, why should prices go up in Nigeria when fuel prices are going down internationally? The cost of refining fuel has gone down due to the lowering of the global fuel prices. The irrational logic the Nigerian ruling elite wants us to believe is that the lower the price of fuel internationally the more we pay locally. The born again advocates of the current deregulation were silent when the price of oil was at $147 per barrel some months ago. Now that the price of oil is within $40-50 per barrel, they suddenly discover that subsidy exists.

Thirdly, if subsidy exists where are the funds to pay for it coming from? If the funds to pay for the subsidy are coming from the proceeds of the sale of oil itself, can it still be called subsidy? In some dictionaries, it is regarded as part of the cost of production since no loss has been recorded.

Nigeria currently produces over 2.5 million barrels of crude oil per day at the estimated production cost of less than $9 per barrel. And 300,000 barrels per day are allocated for domestic use. This is also majorly exported due to the collapse of the domestic refineries. The huge surplus made from the sale of the domestic allocation alone is more than enough to finance the cost of fuelling the nation.

Of course, these figures mysteriously disappear from the government figures and tables as currently published by PPPRA. What is constantly shown is the 'landing cost of fuel', which they allocate a figure for.

Currently, the PPPRA wants us to believe that the landing cost of petrol in Nigeria is N73.10 and the cost by the time it gets to the petrol station is N86.30. Therefore, there is a subsidy of N21.30, a figure arrived at by removing N65 from N86.30. This is quite laughable. Included in the overall figure is a total sum of N23.03 representing various charges by government agencies and private individuals/organizations charges that they want to pass onto the masses. This includes port charges, storage charges, bank charges, etc. This is a scandal!

As at December 2008, the same PPPRA stated that the landing cost was about N50, which was part of the reasons why they reduced the price to N65. Since then the price of oil internationally has fallen further but the reverse is the case in Nigeria.

The argument that the Naira is losing value is also included in the current reasons for the increment. Who with all "supreme knowledge" decided to devalue the Naira by more than 40 percent and it is still going down, was it the masses?

There is clearly no subsidy anywhere. What is happening is that the Nigerian ruling elite through Yar'dua wants to punish the suffering masses for the crisis that they themselves caused in the first instance.

Real Reasons for "Deregulation"

Speaking at the 11th Annual Tax conference on May 8, 2009, the Minister of State Finance declared that government revenue per month had dropped by as much as 50% since the beginning of 2009, from about $2.2billion per month to about $1billion per month now. Since the beginning of the global economic meltdown the price of crude oil has crashed internationally from over $130 per barrel to within $40-55 per barrel now.

Yar' Adua, President of Nigeria (Photo by Andy Mettler on swiss-image.ch)Yar' Adua, President of Nigeria (Photo by Andy Mettler on swiss-image.ch) However, when the going was good, when the oil boom was on, the government did not remember the masses then. Billions of dollars were crudely stolen or completely mismanaged/wasted. Numerous tales of corruption continue to fill the media. In fact in spite of the oil boom, they made living for the masses a hell.

Literally minutes into the global crisis of capitalism, which the Nigerian ruling elite are part of, they wanted to make the working masses pay for the crisis, while they make more money in the process. This is the essence of Evil.

The Naira had been devalued, which translates to a reduction in the real wages of the Nigerian workers; companies are folding up making more unemployed, fuel prices keep going up, with education only for the rich, etc.

Within the past 23 years, the various bourgeois regimes, both military and now civilian, have always implemented the various draconian policies of the IMF/World Bank. The devaluation of the Naira and the increment in fuel price had always been top on their agenda.

Then these policies were geared towards sucking money from the masses in order to pay the fictitious foreign debts and still pay off the local bourgeois. Of course, the fictitious foreign debts have been reduced thanks to the oil boom but there is now a huge domestic debt, huge profit levels to private individuals and companies, huge expenditure on less than 10,000 "elected" government officials, etc, that the ruling class are committed to.

On so-called elected officials and top government officials, government spends over N1.4 trillion on their wages and remunerations alone; starting from the president to the local government councillor.

Robbing the Masses to Pay Otedola, Dangote, Oando, etc

Over the past few years, a handful individuals have been transformed into billionaires at the expense of the masses. Currently, two Nigerian billionaires, Otedola and Dangote, have made the Forbes magazine list of global billionaires. A few local oil companies have also joined the billionaires' club thanks again to the government. However, the multinationals have maintained a very high profit level from the downstream oil sector over the years too.

These billions were made by government giving them licenses to import fuel and in most instances their funds are never involved in the risk. In most instances, all they have are bank guarantees in the form of pieces of paper and nothing more. They are to buy and import the fuel on behalf of the NNPC. All the funding is done by the government, while they make all the profit.

This is a highly parasitic arrangement as there is really nothing to stop the government from directly importing the fuel thereby eliminating the huge profit margins of these individuals/companies. The corrupt practices in the downstream oil sector are record breaking. In order, to continue to import fuel, the refineries, depots, pipelines, etc, were all put out of order.

Ruining of the Oil Sector

Over twenty years ago when these IMF policies were imposed, Nigeria had four refineries working. Now, they have all practically collapsed. The refineries then had an installed capacity of processing 300,000 barrels of oil per day; now they process practically nothing.

No new refinery has been built over the years, despite the fact that past regimes had issued over 18 licenses to private companies to build their own refineries. So much for all the talk about the private sector led economy. However, they are all ready to pay peanuts for the existing refineries.

Secondly, we saw the systematic destruction of the refineries and a few individuals making billions in the process. It is on record that billions of dollars had been spent on turnaround maintenance of the refineries without any turnaround actually taking place. In addition, the government appointed management of the refineries ran these corporations aground with all forms of corrupt practices.

The pipelines are obsolete and the national depots have practically collapsed due to lack of maintenance and the policy of fuel importation. All this explains the convergence of all fuel tankers in Nigeria to Lagos. Lagos had only four fuel depots about three years ago, now there are 44 depots in Lagos. This is due to the fact that Lagos has the only functional seaport. Most of these fuel depots are substandard. So much for the efficiency of the private sector! Hence if anything happens to the fuel supply in Lagos, the entire country would be starved of fuel within hours.

Meanwhile, fuel consumption has increased over the years; it is currently at 30 million litres of petrol, 12 million litres of kerosene, 18 million litres of diesel, 1.4 million litres of cooking gas per day. It has been estimated that 530,000 barrels per day would meet this demand. It means that building a single refinery with the capacity of the Kaduna refinery would meet this demand if all the other refineries were working. This will definitely not happen with the Nigerian ruling class that is in power.

Oppose deregulation

All these mispolicies of the past have ruined the oil sector and imposed hell on earth in Nigeria. In spite of the overwhelming evidence that they have created more problems than solutions, the Yar'dua government is still hell-bent on imposing more draconian policies, all in the interests of the minority and parasitic rich with their imperialist backers aboard.

The deregulation being imposed right now is towards totally allowing a free rise in fuel prices at the expenses of the working masses and to the benefit of a few individuals and companies. Currently that is the case with diesel, kerosene and aviation fuel. The Naira is also being devalued; meanwhile they are not ready to increase the wages of workers or create more jobs. And the privatisation of the existing refineries is still top on their agenda.

Nigerian workers in alliance with other poor strata of society have waged heroic struggles against all these draconian policies in the past. This led to a significant delay in the implementation of some of the attacks and in some cases outright victory. In the past years, we have had about nine general strikes against fuel price increases. The last was in June 2007. Since then the regime retreated, and now they are desperate. The fact that the refineries have not yet being sold is due to the workers' struggle. Only mass action can stop the regime from continuing with its anti-people policies.

Socialism only way out!

The current situation is a further confirmation that there is no way out of the current crisis on the basis IMF-World Bank inspired "neo-liberal" capitalist policies. Rather they lead to more ruin and more poverty in the land. The idea that the 'private sector' can save the oil sector has proven to be completely false.

The various policies of the IMF-World Bank have failed woefully. Nigeria is now worse off than when it started implementing these policies and things are getting worse by the day. These policies have only benefited an extreme minority of individuals and companies who are mainly parasites. The crisis now is due to the interest of the privileged few conflicting with the interest of the mass majority.

Deregulation would bring about more problems than solutions. The leaders of labour at several times say that they are not opposed to deregulation but according to them some things must be put in place first. They say that the refineries must work first before deregulation. The question can then be posed: if the refineries are working why then do you deregulate? This position is not well informed.

The ruling elite is not interested in building the economy; they have no faith in Nigeria. They are only interested in amassing more loot for themselves at the expense of the overwhelming majority. They never care about the negative consequences of their actions. This explains why in spite of the fact that making the existing refineries work and building new ones would not only meet the fuel requirements of the country but would save the country billions of dollars, they prefer to import and abandon the refineries.

Only the nationalization of the entire downstream sector under workers' democratic control with central planning is the solution to the fuel crisis. This task can only be carried out by the Nigerian workers in alliance with other poor strata of the society. On the basis of a nationalized economy under workers' democratic control, the entire oil sector can be reorganized to directly benefit the masses and the huge surplus made from oil can be used to develop other sectors of the economy such as power, industry, roads, education, etc.

However, socialism does not drop from the sky. The working class must fight for it. The privileged few, which the Yar'dua regime represents, want to continue to arrogantly impose their will on the people at all cost. However, they are like ants when compared with the working class, as nothing works without the workers.

What is to be done?

The current situation imposes a lot of tasks on Nigerian workers. First, this current attack must be resisted. Workers must put pressure on the Labour leaders to call for a national general strike against the fuel price increases and deregulation, combined with the demand for wage increase among others. Committees of action with power must be set up in all factories, work places and even in communities. Workers must oppose privatisation and deregulation in its entirety and put pressure on the union leaders to drop the idea of deregulation under any guise.

Now is the time to build the Nigerian Labour Party. Labour leaders set up the party but the party is yet to be fully functional. The problems facing the working masses are political in the final analysis. If the bourgeois parties say they cannot increase wages, provide fuel, power, education, etc, then the masses must boot them all out of power and replace them with their own representatives who have ears. For Labour to solve the crisis it must adopt a Socialist programme as capitalism has failed.

Say no to fuel price hikes!
Oppose privatisation of the refineries!
Oppose deregulation!
Build the Labour Party with a Socialist Programme!

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