ON WHOSE AGENDA IS DEREGULATION OF FUEL PRICE?

After reading this piece, you will understand why our leaders are fighting us to deregulate the downstream oil sector and remove subsidies where they exit; you will see why our people must cry so that their people can laugh. We are not free from the colonial magnate with our leadership. Read on.

The picture of unfavourable market forecasted by the developed countries concerning future price of oil is captured by this statement:

“The price of oil is likely to soar to an average of US$150 /bbl by 2010 and continuing to rise to over US$200/bbl by 2012”, said Jeff Rubin and Peter Buchanan, analysts with the Canadian Imperial Bank of Commerce. The CIBC report says this will translate into steadily rising prices at the gas pumps, rising to as much as US7 a gallon by 2012”

The reason for the pressure for price increases was thought to arise from the aggregate demand for fuel generated in the OPEC and independent producer countries, which subsidize fuel prices. The increasing local demand for oil would reduce the available oil quota for export, assuming oil production does not increase, and the reduced supply would instigate increase in international market price. See how the issues were raised:

“……there is little evidence to suggest that there is any compensating reduction in global demand growth. Instead, aggregate crude demand remains robust as burgeoning demand for crude oil outside of the OECD, and in major oil-producing countries in particular, has more than offset demand destruction in OECD markets. Juxtaposed against more limited supply gains, the resilience of demand in developing countries points to increasing global competition for increasingly scarce oil resources”

"Car purchases in Russia, for example, are exploding as US sales stagnate, while in India the advent of the Tata Nano, a car that will sell for as little as US$2,500 will allow millions of households in the developing world to own automobiles when they otherwise could not. It is the savings necessary to buy a car, not the price of gasoline that poses the greatest obstacle to fuel demand growth in those countries.

"For the most part, soaring rates of domestic fuel consumption, particularly in OPEC countries, can be traced to egregiously low pump prices. Gasoline in the 25-cents/gal range in Venezuela and in the 50-60 cents/gal range in Saudi Arabia, Kuwait and Iran, have not, surprisingly, spurred enormous fuel appetites in those countries. Not only is the demand for fuel there price-inelastic but the elasticity has the wrong sign. In other words, higher world oil price only serves to boost demand, because they bring even more money chasing massively subsidized fuel”

In Nigeria, the use of personal cars increased in the past 10 years and recently, importation of fuel-inefficient cars from USA and Europe is in vogue among the political class and elite businessmen. This is apparent, although data are usually unavailable in our setting. The growing economy is stimulated by heavy use of oil for energy generation and transportation. The increasing demand for oil products in the country is expected in the circumstance, but can be reduced if the policy direction encourages alternative energy generation. Until sustainable cheaper alternative energy resources are available to the industries, it is not advisable for the government to create new strictures in the energy chain. We can take China and the Asian countries as good examples. They used subsidies in fuel price to drive their economies and now my computer, fridge, torch etc are either from China or Asia and the prices are affordable. Growing from economic dependence to economic independence and interdependence is only possible with nationally motivated decisions. Those who advocate absolute free market are already in a position to gain from it because they have instruments to control the market forces. Where they are not able to do so, they use political forces that are loyal to them. They cannot agree that China and several other countries have used subsidies to give leverage to their economies and achieve good fiscal balance sheets. What are the fears that surround fuel subsidy?

"The more oil is consumed in oil-producing countries, the less oil will be consumed in the OECD. Since oil-producing countries effectively have first call on their own oil, the balance is the residual which the price mechanism must ration.”

“But by distorting fuel prices, China is encouraging fuel consumption and discouraging the use of new energy.”

“Fuel subsidies have exaggerated inflation in the developed world, while understating inflation in the developing world. China's inflation could well hit 15 percent if Beijing were to free up caps on energy prices, Morgan Stanley estimates.”

"If China is not able to take away the subsidy and cut down its demand, it will have huge implications for the world,"

“……many emerging economies employ subsidies that keep domestic fuel prices far below the world price. As a result, these countries consume far more fuel than they would otherwise. By one estimate, countries with fuel subsidies accounted for virtually the entire increase in worldwide oil consumption last year. Without this artificial demand stimulus, world oil prices would have been significantly lower.”

“Subsidizing fuel does nothing to reduce the inevitable suffering, and actually makes it worse. The problem is that when the price of a good is below its cost, people use it wastefully.”

(Frank, 2008)

The above statements show why the developed world is unhappy with countries like Nigeria. What are we expected to believe? The West does not care about socio-economic pressures in the developing countries, since financial aids from their gains will be given to ameliorate them. Their concern is more about socio-economic stability in Western world and little attention is paid to what it costs the developing world. See how it is scripted:

"Giving out subsidies is an easy and popular thing to do, but getting rid of it is like hell….. While the West is critical of China's energy policy, there is little outcry for change within the country.”

“Subsidy proponents cite the firestorm of political protest that would erupt if fuel were to sell at the international market price. That fuel subsidies are wasteful, however, implies that there must be less costly ways to keep the peace”

The foregoing referenced statements clearly show the insensitivity of the West to socio-economic stability in the developing countries. The West has fully studied their economic needs and is using every agency to promote the satisfaction of these needs. Calling it an economic war against the developing countries may be an overstatement, but it sounds to me an insensitive aggression against the socio-economic sensibilities of these struggling nations, which the West has not studied their internal dynamics.

Some truth should be faced about increasing international fuel price and it is acknowledged by a Western writer:

To be sure, subsidies are not the only cause of high crude oil prices. Strong global economic growth, particularly in Asia, is requiring a lot of energy. Political tensions between the United States and Iran and market psychology have played a role (Bradsher, 2008).

The fact that other factors may be responsible for propping the oil price, other than the steep demand for oil in oil-producing nations with fuel subsidy, was clear when oil price collapsed with changes in the fiscal climate in the West. The stalling demand in the West, because of credit crunch, drove the price down, even when the oil demand in the oil-producing nations had not abated. The Western demand was apparently propelled by excess fiscal liquidity from foreign reserves in the hands of market speculators. Also, it was this liquidity that encouraged banks in the West to give outrageous loans to home owners. This makes it possible for the dollar to depreciate without the naira appreciating despite our growing foreign reserve. But we do not have any choice. The reason is that our wealth can only be secured in the institutions of rich nations in the West. Economics is so mixed with politics that what is done is frequently what is expedient.

The solutions suggested are the use of cars consuming less fuel and electric cars using cheap electricity. These cars are not likely to reach the poor countries in subsidy band until their second-hand rates make them affordable.

Elimination of fuel subsidies, IMF claims, will ensure public spending is directed to more productive uses, encourage efficient use of energy and target social assistance at those that are truly poor, by increasing access to or improving the quality of education and health care services, improving physical infrastructure, or reducing taxes.

The education and health sectors are areas the West is not uncomfortable if the government does not embark on any deregulatory policy of subsidy removal.

A productive sector worthy of the governments’ attention like in USA is the productive energy sector that generates more fuel through their refineries or provides alternative energy that will make crude oil less significant. A substantial assistance was offered to private energy companies in USA to the tune of $6 billion dollars through Bush-Cheney Energy Bill, as a form of subsidy.

WE NEED POLITICIANS WHO THINK AND ACT FOR THE GOOD OF THE PEOPLE. WE MUST HAVE KWONLEDGE-DRIVEN DECISIONS

The entire subsidy as it is now in Nigeria goes essentially into the productive sector either directly or indirectly to entrepreneurs who need fuel for transportation to move people, goods and services, small-scale to large-scale industries that use energy to maintain some level of productivity. We have not had public power supply for more than a week in my part of the town and I have had to burn a gallon of petrol to be productive for my sake and for the sake of all Nigerians. I stop for today.

Loretta Okafor’s article can provide more information

FROM DEREGULATION TO REFORMATION

The lexicons of manipulation ring in the ears of Nigerians, from deregulation to reformation. I do not believe anyone representing the government in the petroleum sector. The loss of faith derives from their double-speaking and incoherence. They have lost the national flavour and are speaking in tongues of men in the dark, like the Speaker standing on the yogic head, confused about the intricacies of the sector. They are stooges trained in the poor management of the sector for the comic ending of our national pride. Management of subsidy requires transparency, sense of purpose and a clear direction to the national target. These individuals evidently continue to say they have lost the handle. The Yar’Adua administration began to fail with the infiltration of buy-out and buy-over mongers with experiences in sell-out strategies, who understand the interplay of supply and demand and how to use it against helpless Nigerians. Today, I spent more than two hours to buy fuel to run my kids to a distant private school (passing by a nearby “dead” public school in a deregulated Universal Primary Education) and run my power generating set at night. I am writing this piece in order to sleep well, knowing that I have bared my heart to Nigerians who practice the “blunders of the world” in order to leave no enduring legacy as building blocks of our nationhood

_________________________________________________________

Mahatma Gandhi’s list of the “Seven blunders of the world”

(1) wealth without work

(2) pleasure without conscience

(3) knowledge without character

(4) commerce without morality

(5) science without humanity

(6) worship without sacrifice and

(7) politics without principles.

____________________________________________

We need to redefine our paradigm. Saving money to help Nigerians has never been a sincere testament. If it is so, why has Nigeria continued to degrade in public execution of people-oriented policies (created militants)? If it is so, we won’t be having trans-regional (within Nigeria) high-ways that are not “motorable”, etc, since the time of PTF and DFFRI. We see high-ways with gullies and hospitals with new dysfunctional equipment and increasing failure of public service infrastructure, like FERMA roads that degrade in months. We continue to hear sermons of degradation to make us think of the past with nostalgia in some respect.

I have not lost faith in my President and may his silence reward him with inspirational touch to continue to direct the affairs of the nation creditably.

Failing in the national call

Failing in the national call

“When the Nigerian National Anthem was played before the commencement of the World Cup qualifier between Nigeria and Mozambique in Abuja on Saturday, October 10, 2009, rather than obeying Nigeria ’s call, a large section of the football fans booed.”

http://www.vanguardngr.com/2009/10/29/“arise-o-compatriots…”-booooo/

Is this the formation of the National Social Resistance Brigade?

A government that cannot bend to reason will break. When it does, the splinters hurt the ruled like fragments of an exploded bomb. The defence minister should watch out for assault to our national prestige by internal dissidents who shun the symbols of our nationhood. This is a build-up of resistance to bad governance and may culminate in a national social constipation. It shows that the National Orientation Agency is doing little and Akunyili's campaign is yielding negatively. Where do we go from here? The national anthem is laden with statements about where we are heading as a nation, but the words are meaningless in the actions of our national actors and operators. You can refuse to cheer a team that is failing in a national call, but you can’t refuse a call to our national ethos. That is an issue which must be made clear to the citizenry. The trait of unalloyed loyalty to the ideals of a nation is learnt in the formative years of human development. We must go there to revalidate the basis of our nationhood. I am not saying that the older ones are a lost generation. It is a well known fact the use of the right hand can’t be learned by left-handed individuals in adulthood. Reformation from left-handedness is always possible when you are young. I am a good example. I can use both hands and either of them equally. In my culture, this linguistic expression portrays me as a double-dealer full of ambiguities, but I can make wise choices of what is good for me and others. The youth development programmes should be given attention and streamlined towards achieving our national goals by instilling the compelling desire to work for our national greatness.

Several people are failing in national calls because they are square pegs in round holes. In great nations, people who lack purposeful convictions in an arena or area of performance refuse national calls because they do not want to fail the nation in such calls. Mohammed Ali refused the call of his nation to serve in the army during the Vietam war, because he wouldn’t be a good soldier in a war he did not believe in. In Nigeria, people hardly refuse a call even when they have a great chance of failing or performing below the expected target for national growth. It is irrelevant because national development is an undefined quantity. What has a clear definition is the self- interest or group-interest that must be protected. It is the failing in national calls among the “servants” in government that neo-colonialism crystallizes. Those who are true nationals now see the country as a colony exploited by cabals wearing Nigerian gabs.

This is a country of antitheses. We know what national development is. We control developmental processes so that there is no lopsidedness. We want to balance the nation on a tripod and not on a fulcrum. We remove outright competition and structure opportunities to favour those with obvious disadvantage in a fare competition. It is executed everyday because it is lawful. We see this in federal character policy for employment, university admissions, rotation of offices to balance power of national administration. Those who are stronger often have been conceding to the weaker so that the nation may thrive. These are few of the regulations that are nationally expedient. Now, the neo-colonialist among us has remembered that the quality of competition and the survival of the fittest would invigorate a nation in the threshold of greatness. We are reminded that competitive pricing is the hallmark of great nations. Are we going to move from here to consider the competitive pricing of human resource and allow Nigeria to grow heavy in the head even as tall as we are as a nation, in order to be caricatured as a heavy-headed giant who spun and fell on tiny feet?

Deregulation, as an instrument of testing competitive prowess or as an opportunity to invite more players, is not an attribute of this nation. Those we are inviting to come and compete do not believe us. Our policies are ambivalent and inconsistent. They cannot trust us fully with their investment funds. A foreign investor cannot trust a country that boasts about shareholders losing their money without caring to help with supporting instruments; a country with various institutional malfeasances. Who will trust a country that nationalized foreign investments in the oil sector some decades ago? Any investor you see is going for a pound of flesh when the going is good. Give them the pricing fluidity they want, they will come with as little infrastructural commitment as possible. In fact, the neo-colonial structure is the best for them; like the crude from our country and the refined products from theirs and the pricing mechanisms will balance the scale so that they lose less from crude oil price surge. These facts are very clear that they are not only in the imagination. Without bilateral agreements having structures that offer protection to the weak through concessionary pricing of fuel like it is obtainable in crude oil-rich nations, there is no guarantee for any foreign investors’ funds, because I would be one of those that would frustrate any contrary arrangement that is not in our national interest.

As I am writing I am watching workers like me walk on the streets of Abuja, telling those with ossified will of punishing the poor in a rich nation, like they did in the Niger Delta, that we are no fools even if they go against our will. They can be neo-colonialists, but we are more comfortable being nationalists, because those who founded this nation were like us. Our patrons wrote, they marched the streets, they called for national development and they knew our exigencies which we reiterate for the present government. Those patrons dug deep to reinforce the foundation of this nation and we do the same looking out to mend the frailties that may jeopardized the future viability of our nationhood.

Artificial scarcity of fuel in Umuahia

Fuel scarcity paralyses Umuahia:

“Investigations by Vanguard showed that petroleum marketers in the city were creating artificial scarcity, as they only sell at night at inflated prices of between N85 and N120.” By Anayo Okoli

http://www.vanguardngr.com/2009/10/29/fuel-scarcity-paralyses-umuahia/

There is an official connivance any time when fuel scarcity occurs. People are making profit through official mandate. It means PPRA has been bribed and the State government is comfortable with it. PPRA must pretend not to be watching. It means failing the nation so that the cabals of the Nigerian economy can enjoy a free market at the expense of the powerless economic slaves. Do we have a government that cares for the people? This is God’s own State where God will do it after all.

In Maiduguri 2,000 Km from the coast, there is no queue because the government is working by insisting that all the agencies are closely monitored and supervised and black market rate is as low as 70-80 naira/litre. The South-East is a big question mark. It is a clear sign of what a deregulated regime will bring because it will be gangsterism and confusion. The Umuahia saga should not happen in a regulated system where laws are expected to be obeyed, and in a deregulated system, you expect PPRA to do anything to protect Nigerians from profiteering. Shame to us who cannot look after ourselves.

Is government telling the truth about the downstream oil sector?

The NTA Tuesday Live yesterday, October 27, 2009 was about understanding the problems of the downstream oil sector and the panellists were a number of government stooges who had limited information about the issues on the ground. Those who phoned in and the audience were better informed than the government officials. I did not waste my time and money watching the programme, because I came to a greater realization. Information is power and the power is still with the people. I was very interested in this topic and had to keep awake and fuel my electric power generator. I believe most Nigerians did the same. What the government does not know is that Nigeria has a very large population of highly educated and well informed people, but unfortunately, these people hardly act until the crisis point because of patience and hope in the ability of insensitive rulers. The honourable member on the panel believed that Nigerians are not knowledgeable enough and he was guiding them with his euphemisms and sophisms, thinking he had a platform for good arguments. A cautionary note here, however, is that history repeats itself. When the government does not know its people, and thinks it knows the manipulative instruments of public will, things happen in ways that the ruler and the ruled will regret. It is not far behind us that the government fixed gate fee that excluded Nigerians from watching our football team play in Abuja. The politics of exclusion is staring us in the face and a member of the Economic Summit Group is a protagonist. What baffles me is that those who should have information do not seem to have it, or they have it but refuse to work with it out of selective discountenance. The politicians we have now are going to mess up the oil sector, if we are not doing something within our capacity to redirect them. Our legislators seem not to have research workers who bring contents to their thoughts and therefore, alienate themselves from the people they rule. We cannot progress without reformation of the individuals that must rule us in the direction of knowing the real needs and feelings of the people.

The honourable member of the house on the panel said the leadership was taking decision on the oil sector for our own good because we do not have the facts. He positioned the argument that price of fuel will be the incentive for private sector participation. That is untrue. The government guidelines and the operational incentives that facilitate business are the stimuli. Lower cost of doing business, guarantee for policy stability, tax waivers and crude cost discounts are some of the incentives refinery entrepreneurs are looking for. When government has created several operational bottlenecks that have nothing to do with fuel price, the refineries will not be established; and foreign producers of fuel will not co-operate with Nigeria without bilateral agreement that will be favourable to them in the long run.

The oil cabals have worked well to sustain the skewed operation of the sector, but their operation will eventually end in favour of public good. I know this because we have great hearts for goodness. My reassurance came this morning during rush hours when a Nigerian motor cyclist in business suit stopped to control traffic in a messy hold-up. What a gracious thing to do! Nigerians know what is good for us. Arise Oh Compatriots, Nigerians call obey……. The workers in Nigeria and the general public must stand up to the issues now or never.

Re: Let us deregulate now! Vanguard Newspaper

"It makes no sense insisting that a government that has demonstrated its inability to repair and operate the refineries must continue to spend our money in that direction.Government has also confessed its powerlessness to deal with the so-called cabal that freeloads on the over N600 billion it spends every year to subsidise fuel imports. Government has admitted its own failure. What is the need of insisting it must keep trying?" By Ochereome Nnannahttp://www.vanguardngr.com/2009/10/26/let-us-deregulate-now/

Deregulation is not merely the answer. The operators have a skewed definition of deregulation as free market for profiteers and enemies of our national economy called cabals and freeloads. The "government has admitted its own failure", but must that government fail to look at itself for correction in the area of failure or be corrected. An inefficient government that cannot be moved or removed is the cause of democratic instability in Nigeria.

It must be understood that the validity of a government is based on its functionality. The government wants to function in default like a man with fire extinguisher watching a match fire burn down his home. That is incredible for a sane society. The cabals have made the establishment intractable and inscrutable to goad us to a free market for the freeloads that will ensure a free flowing profit out of the exuberant tears of the owners of the black crude oil. We cannot wait for the worst thinking it can benefit us in the long run. Obasanjo co-operated with the cabals, but Yar'adua seemed not to have done so. The resolve to go beyond resistance is necessary for us to see important pro-active measures. If a poor country like Mozambique is thinking about its poor people by having concessionary fuel price in Africa, it is evident that good democracy can foster an emerging great nation built by good people in government ( http://www.mg.co.za/article/2009-07-24-mozambique-to-pay-stations-keep-fuel-price-low ). We cannot make excuses for an outright deregulation. If we think well, we can come up with a model of deregulation in the downstream oil sector that would sustain development in Nigeria. What the government proposes now can only put us in strait-jacket and it is not our wishes 0r my wish.

Agenda for Nigerian University Education

Agenda for Nigerian University Education

The Global Report on university education which appeared in NEWSWEEK (www.newsweekinternational.com) of September 15, 2003 is an excellent reference material for the Committees on Education in the Nigerian Houses of Assembly. The essays in that report stimulated my thinking to reflect on the agenda for Nigerian university education. The ASUU struggle is underpinned by a determination of the leadership to take the bull by the horns and strive in the direction of developing a road map for university education. The pertinent issues are recurrent because of the drawback of “gastric” thinking incessant in the national polity. Our politicians need serious proactive thoughts and action to move educational issues in the appropriate direction for national development. This is why I recommend they read the global report and attempt to situate the Nigerian scenario in the global picture.

No nation develops without its universities. The ability to solve national problems is gauged by the preparedness of the citadels of learning to engage in systematic appraisal of national issues and face them like the dynamite before the rock. No problem gets solved without good thinking and research-based solutions. Empirical and data-driven analytical researches will take Nigeria to heights most sceptics have never imagined. A lot of Nigerians seem to have given up being Nigerians in the national sense except where the posture provides individual sustenance. Who will bail the nation from automatic self-destruction from political ineptitude? Where is our hope in the future? Is it in the “rebranding propaganda”? No! It is in the educational revolution that is sustained by ASUU. The people in the education sector are mobilizing and revolting recurrently and persistently against the status quo. ASUU is thinking for the nation. “Good thinking, good product”. Good research oriented nation will beget a resourceful, progressive, great nation! The gimmick of a great nation evolving from goodness of its people is unflavoured and bland on the palate. The mundane goodness practiced by our political class will certainly not lead to the emergence of a great nation. The national culture has exalted those who grab the national cake and dole out crumbs as gifts to feed their sense of goodness. People of knowledge and competence are sidelined, frustrated and prevented from participating in national renewal. They are turned into political self-seeking individuals whose only joy stem from how much can be extracted from the national inefficient systems. The national “cow” is milked without care of the teat, the udder and the entire body. The national “cow” is ill and I called in the veterinarian. The evaluation of the clinical condition demands that we engage the theses of BARBARA KANTROWITZ (“Learning the Hard Way”) and VARTAN GREGORIAN (“The Secret of Our Success”) in NEWSWEEK (September 15, 2003). These theses did not assess the Nigerian background of educational “milk fever”, because of the “cow’s” hopelessness and seeming appearance like a “carcass” deserving of only a “post-mortem examination”.

By my thinking, the Nigerian university education is on a stalled ascendancy. The sector is populated by competent, well trained and self-motivated academics without adequate national drive and focus. The political cabals are imprisoning them in non-intellectual barricades where they lose their resourcefulness and sense of national direction and commitment. To help revamp university education through an understanding of our commitments, I examined the issues raised by the NEWSWEEK writers and identified cardinal points to be included among the agenda for university education:

• This nation will never achieve any pre-eminence without a network of universities.
• The path to sustainable development is created by the capacity for research.
• The federal government has the responsibility to provide adequate funds for basic research.
• The federal government should promote private philanthropy by private sector motivation.
• The universities should be given more autonomy without outright privatization.
• Democratization of the universities should ensure that diversity is promoted so that no one suffers disadvantage because of political, economic, ethnic or religious identity.
• Teaching should be integrated with research and the culture of research imbibed at all levels.
• The universities should engender intellectual competition and strive for excellence.
• University teachers should never be turned into unmotivated public servants.
• Our universities should be where the best professors want to stay and the best qualified students seek admission because of the available facilities and hands-on experiences.
• The university system should have the vibrancy to generate new ideas and allow the best ideas to win.
• International students should be attracted to our universities to help export our national image and encourage international co-operation.
• Administration of the universities should evolve a template for governance that promotes national ideals.
• The university should impact the society through community service.
• Our university graduates should be prepared to meet the challenges of a developing nation with the capacity to understand problems and find solutions.
• The effectiveness of our universities to achieve identified national goals should not be guesswork and therefore, a longitudinal product/system analysis is needed.

We ought to have universities where skills are thought and acquired for national development and this is important if vision 20-20-20 is to be realisable. Our “brand” emanates from the universities. This is where to start the campaign. “Good product, good thinking”. Who and what our universities produce make us the “brand” we are.

As ASUU engages the federal government, we as a people should be clear in our understanding of where we are heading to. The above agenda can help us clarify our mission in the universities and help build a nation we are proud of. Our pledge is not to destroy what we cannot rebuild. In a poetic expression:

If the cow is dead without the calf

Because the milk is not in the cistern for the calf

There will not be a herd

And the kingdom of cattle

Will have the future of the dead in eternal sleep

Let the cow live through the struggle for milk

The struggle continues even in our fears for the cow

Our fears abate that the guns will shoot and heads will roll

Have we not got the defence minister who is a General

And the militants are no longer military

But civil in their civilian demand for equity

The struggle continues even with IAP

The equity that justifies the worker is with us

Though we fight for future

We are neither at war nor in battle

We are inflamed to heal the wound

We are not engaged in suicide

Reminiscent of a malignant fever

Reacting to heal by boiling over

To cause a systemic halt and death

Professor Ikechukwu Igbokwe

Department of Veterinary Pathology

University of Maiduguri

Maiduguri.

July 23, 2009.

http://docs.google.com/View?id=dszc9zj_40d29gp9c4