Though the Yar’adua’s administration may have heeded the repeated wise advice that establishing more refineries is the solution to the importation of refined petroleum to meet our current needs of 30 million litres per day, which the four refineries are unable to satisfy, it is however sad that the administration is also thinking of hiking the pump price of the commodity.

Speaking recently while receiving some officials of the Republic of Uganda’s ministry of energy, the Acting Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Alhaji Abubakar Yar’adua, hinted that the federal government was considering establishing more refineries. He said the decision to build additional refineries was not only aimed at meeting domestic and commercial demands but to ensure full use of the nation’s abundant hydrocarbon resources. According to him, by the time the additional refineries are established, Nigeria would "be the hub for petroleum products supply in West Africa and indeed the entire African continent. Additional refineries in the country will go a long way to satisfy domestic consumption and generate more revenue for the country. The nation’s refineries are currently producing at different levels of effectiveness".

But in what can be considered as a counter move, the government has hinted of a possible increase in the pump price of petroleum products. The minister of state for energy (petroleum), Mr. Odein Ajumogobia, dropped the hint in Lagos while addressing the National Executive Committee of the Trades Union Congress (TUC). He said government was thinking along this direction because it was spending too much money subsidizing petroleum products. According to him, the government would have spent about N1.5 trillion on subsidy on petrol and gas by December this year if it continued the subsidy.

The minister reiterated what he said in December 2007, to the effect that the "continual subsidy was harmful and a disincentive to the economy and investment and that only the few rich and opportunists in the country benefit from the subsidy". He was quoted as saying that Indonesia and Ghana sometimes ago removed subsidy on consumption of goods and allegedly reaped sound economic growth later. The minister then urged labour organizations to support the removal of subsidy on petroleum products.

But we at Nigerian Newsday, like most Nigerians are totally opposed to any form of increase in the prices of petroleum products through the removal of the so-called subsidy. As we have often observed on this issue, Nigerians and Nigeria have never really in any way benefited from the withdrawal of the so-called subsidy. While it could be true that Indonesia and Ghana may have witnessed growth in their economies as a result of the withdrawal of subsidy on petroleum products, in Nigeria, however, similar moves by government in the past had only ended up damaging the national economy and further pauperizing the already impoverished citizens. From 1988, when the then military president, General Ibrahim Babangida increased the pump price of petroleum products under his regime’s Structural Adjustment Programme (SAP), up to 2007 when the former president, Chief Olusegun Obasanjo did so several times under his privatization programme, Nigerians and Nigeria have become the worse for it. Even the World Bank, which has always canvassed the removal of subsidies as a means of achieving economic growth in third world countries testified in its 2006 report that inspite of the huge revenue accruing to the government from oil, the poverty rate in the country has increased from below 60 per cent to 70 per cent today.

Cleary in our case, the savings made from the many subsidy removals are not working, at least not to the benefit of ordinary Nigerians, who are daily grappling with crushing poverty. If government cannot subsidise a vital commodity as petroleum, which by the way is produced locally, then what else can it subsidise for its poor citizens? The Nigerian economy and the economic wellbeing of Nigerians depend a lot on oil, so any increase in price will immediately lead to increase in the prices of goods and services. This in turn will result in further pauperization of the majority of the citizens and the collapse of many businesses as it has always been the case in the past.

It is important for our leaders to borrow a leaf from advanced countries like America and Britain that heavily subsidise their agriculture sector in recognition of the significance of the sector to their general economies. While the government should go ahead and build more refineries as announced by the NNPC boss, it should not nurse the idea of increasing the prices of petroleum products, as this will not achieve anything tangible, given our past experiences, rather it will inflict further pains on the already battered Nigerians.

It is reassuring that the National Union of Petroleum, Energy and Natural Gas Workers (NUPENG) has kicked against the idea. We call on other well-meaning Nigerians organizations to plead with the government to drop the idea of any increase in the pump price of petroleum products, at least not in the immediate future, because the country as a whole, especially the poor, who form an overwhelming majority of the population, cannot bear such a needless increase.