The fear of popular uprising toppling his government again as it did in 1984 may be the underlying reason behind President Muhammadu Buhari’s insistence on petrol subsidies, even when it is coming at a great cost to the economy.
According to the Nigerian National Petroleum Corporation (NNPC) Africa’s biggest oil producer now consumes about 103 million litres of petrol daily all imported, up from less than 35 million daily six years ago pushing the cost of government subsidies to over N150 billion every month.
Despite this drain on the economy, Buhari has rejected all counsel to end petrol subsidies. Analysts have often attributed this to the president’s statist tendency and his military background with its command and control structure.
But these may not be actual reasons. In his interview with Arise Television on June 10, Buhari revealed how the ghost of mutinous soldiers toppling his government and arresting him, still haunts him to this day.
When asked about why he continues to allow subsidies, Buhari admitted Nigeria’s petrol is smuggled across the porous borders out of the country in cans atop motorcycles, adding that if he tried to stop the practice.
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“Nigerians will say this is their oil and they will push you out of wherever you are, even if it is a presidential villa,” Buhari said, underscoring a perennial fear of being removed from power.
During his presidency, Buhari on several occasions has returned to the events of August 27, 1985, when a faction of mid-level Armed Forces officers, led by the Chief of Army Staff General Ibrahim Babangida, overthrew the government of Major General Muhammadu Buhari who was then detained in Benin City until 1988.
Buhari had remained bitter over the coup even though he too came to power by overthrowing a democratically elected government. Several times over the last six years, Buhari has maintained that he was unfairly removed.
At the commissioning of the EFCC corporate headquarters in Abuja, in 2018, Buhari said his first attempt at fighting corruption, corruption fought back successfully and he was removed and recovered monies were stolen. In his Arise TV interview, he reiterated this and during his presidency, the fear of coups is always palpable.
Buhari said his administration’s response to fuel smuggling is appealing to the Nigerian Customs to reduce the volumes smuggled out of the country.
“So what we want is to try to get the cooperation of customs, immigration, and these border guards so that it cannot be taken in substantial amounts,” he said.
Then he patted the Custom officials on the back not considering reports that some fraudulent officials have to be complicit for these kinds of volumes to be leaving Nigeria.
“Customs are doing quite well, because we’re confiscating tankers, selling the petrol and the tankers and the people who are disposing of this, they do not complain,” the president said.
According to reports from a stakeholders meeting organised by NNPC to discuss how best to stop smuggling in the country, the Corporation’s group managing director (GMD), Mele Kyari, said the current situation had continued to bleed the country as it could not sustain the payment of subsidy that accompanies the volume.
“In very recent data, we see what we really want at the beginning of May and June. There was a day we loaded out about 103 million litres of PMS within one day across the depots. We know it is not required, we know it is inappropriate and we also know that something wrong is happening,” Kyari said.
Kyari explained that with the current exchange rate, the pump price of petrol should be N256 per litre.
NNPC data shows that petrol subsidies soared by 397 percent over a four-month period, from a monthly cost of N25.37 billion in January 2021 to N126.30 billion in April.
A further breakdown shows the state-owned corporation spent N25.37 billion on petrol subsidy in January, which increased by 196 percent to N75.13 billion in February.
In March, the petrol subsidy bill increased by 49 percent to N111.97 billion, thereafter increased by 12 percent to N126.30 billion in April 2021.
This pattern of expenditure indicates that Nigeria is sacrificing good roads, hospitals, schools and other investments that would grow the economy for cheap petrol.
