Patitos Post

The other day I wrote about diversifying our economy away from oil and becoming self sufficient in petroleum products. I did not know that we would have another fuel scarcity so soon, but it’s here with us again as we are all too aware of it. But what I find funny is that the NNPC and top government officials are giving interviews on T.V and in the papers trying to calm everyone down stating that there is enough fuel for forty days domestic consumption and even  more will be imported very soon. This is the tail end of the year 2009 and we are still talking about imports to solve this perennial problem! The fact is that Nigeria’s fuel shortages can never be solved by importing more fuel. If it could have, then it would have been solved a long time ago because we have become proficient in importing fuel.

Importing fuel is or rather should be a stop gap measure, a temporary solution or if you will a palliative to relieve Nigeria in the short term. The ONLY solution to our recurring fuel shortages is in building more refineries in Nigeria to meet our domestic consumption and possibly export to neighbouring countries..

I have on this blog in the past written about the national security risk of relying on imported fuel. I remember citing the example of Japan and the U.S and the fact that the U.S entered into the second world war because it was attacked by Japan at Pearl Harbour and the reason for this attack was the U.S embargo on fuel exports to Japan as a way of punishing her for her support of the axis powers and her intrusion into China. As a direct result of that embargo, Japan (which was at that time dependent on imported fuel) faced the threat of grinding to a halt. Now this occurred in the 1940s and Japan has since overcome that issue. But Nigeria is now in the exact situation that Japan is. Supposing there is a world wide crisis that affects the maritime industry and we are not able to import fuel what do we do? Supposing the countries we import fuel from are unable to meet our demands due to some fuel crises much like the food crisis we had last year and early this year, what do we do? Some may recall that there was a food crisis some months ago and the countries that Nigeria regularly imports rice from where unable to meet their domestic and sub regional demands much less export out of their region. My readers may recall how exposed Nigeria was to that crisis. Given that instance, ought we not to take reasonable steps to plan right now to at least become self sufficient in refining fuel for which we have a comparative advantage?

Surely it will be cheaper to refine the fuel in Nigeria and our neighbouring countries will prefer to buy from us rather than import form far away lands. So what is stopping us from doing this? What are the constraints? The major obstacle to Nigeria’s self sufficiency in refining fuel are the cabal of ex military officials, ex- government officials and the fuel importing syndicate that combine to frustrate any attempt to formulate and sustain policies that enable the proliferation of refineries in Nigeria. And I have said publicly that until we have a government that has the will to break this mafia and the empathy for the long suffering Nigerian masses to refuse to be compromised, we will never be able to refine enough fuel for our domestic consumption despite being one of the leading oil exporters of the world.

We have technology existing today as I write this that can cause refineries to be built and operational in as little as 6 months time, but because this is a long term investment that is capital intensive and does not spew out immediate profits, those at the helm of affairs have not thought it wise to pursue this venture nor promote it and on the contrary regularly change government policies in a 180 direction as to scare away those who might want to do it but who are scared of having their investments frittered away as a result of these policy somersaults. In the business of refineries, there can not be room for immediate gratification only delayed gratification and a government that is unable or unwilling to create the environment that encourages those who are willing to delay gratification and engage in this venture will never be able to solve this recurring crisis of fuel scarcity. Yes it is easier to use connections and get a fuel import licence from NNPC and imprt fuel and become an over night billionaire but where does this leave Nigeria? And we see these entrenched interest holding government to a virtual standstill in this sector as well as the power sector by the short term immediate gratification gains they get from importing fuel and generators. So what do we do? Where do we go from here?

As I have said before and still say, the power lies in government to bring about the conditions that will make it less profitable for people to import fuel than it is to refine locally. As I said, one way we can force this process is by placing huge taxes on profits from fuel imports.  For instance, if you import fuel for 10 Naira and sell for 20 Naira, the government will tax 7 Naira out of the 10 Naira profit you have made. This will make it senseless for them to pass the cost to the consumer because whatever profit you make, government will tax 70% of it. However, if you refine locally, government will give you a tax holiday (no tax at all). These people like money and when they see this, they will rush to build their refineries. However, you need a capable honest and steadfast leader to accomplish this because they will try to compromise you with bribes and you have to love Nigeria more than yourself to refuse such bribes.

If we do not do this and continue to rely on imports, we will never become self sufficient in providing fuel for our domestic needs and if we are not self sufficient in this area, our economy will continue to be vulnerable to outside shocks and we will be like a ship without sails tossed to and from with every passing wind of world uncertainty.

And so I say to you the citizen-take some time to reflect and ask yourself if this government is able to take the steps necessary to ensure Nigeria progresses from being a fuel exporter that imports fuel to being a net exporter of both crude oil and refined products. Ask yourself if this is going to be the last fuel shortage you will experience and if not what this administration is doing to change the status quo and plan for a better future with more stability in fuel supply. Remember that irrespective of your tribe and religion, our sufferings are all the same as fuel shortage is not a respecter of persons. Ask yourself if things will improve if we continue like this. And when you have answered the question, please try to resolve the situation by registering to vote, encouraging others to do so, then plan to vote in 2011 for that candidate at any level that you know will take measures to get Nigeria on the way to self sufficiency in fuel supply and encourage others to do so too and most importantly be prepared to GUARD YOUR VOTES!

Once again, God bless Nigeria.

PU.