- Ibe Kachikwu Confessed He Was Hoarding Fuel And Creating Artificial Scarcity
From an economics point of view, in strict economics terms, the fuel price hike can be looked at as the taxation of the masses to sponsor packages of the 2016 stimulus budget and support and sponsor the oil magnates.
While the fuel subsidy was removed since the past December, there existed an artificial scarcity due to unwillingness of the government to spend its foreign earnings in fuel importation and this was followed by the government announcing the price hike to “illegally” push all fuel imports to black market sourced dollars.
Last year Nigeria imported 6 billion liters of fuel. In pure monetary terms, this costs less than $3 billion. Had the government decided to allow Nigerians to keep enjoying low priced fuel, it had the option of buying black market forex to import it and shelving the cost. For $ 3billion, that would amount to an extra expense of 320-197= 123 x 3 billion = 336 billion naira.
The Buhari government decided not to “waste” its 336 billion naira on the citizens as it would rather spend same on its chosen projects for 2016, like the N100 billion total estimate provision of N5000 stipends to a lucky million selected from 90 million poor Nigerians. Buhari would rather tax all Nigerians, rich and mostly poor to the extra tune of N336 billion than give them their right to CBN forex or supplement the gap with the black market rate for them as it does the cabal companies. (See Buhari assurance of CBN dollars to cabal as delivered in his Al Jazeera interview)
So invariably, the Buhari government is refusing to make what could be considered as a sacrifice of N336 billion (though it is not a sacrifice since N197 is the official dollar rate) to rather decide what perks and handouts it will use the equivalent amount of funds for in its budget. All will be taxed and a few will gain.
Many have discredited the way the government chooses the lucky recipients. For instance, the 1 million getting N5000 are selected approximately 30,000 per state. Such a process will be corruption as there are millions of poor per state who will feel cheated. Either all must get the handout or none. This is how social welfare works across the developed world. There is open eligibility criteria. If you pass, you are qualified. If it goes to a selected few then it must be by chance – lottery. Taxing all the poor with the new fuel price hike to support others is most unfortunate.
Kachikwu Confessed It Was A Deliberate Scarcity
The Minister of state for petroleum, Ibe Kachikwu in March of this year admitted that the fuel scarcity was artificial. The minister during an infamous speech where he said he wasn’t a magician, announced that Nigerians should bear with the government as it was strategically reserving/hoarding locally made fuel to make reserves for the “rainy day.” He said he will be done making his reserves in two months and then the fuel scarcity will be relived. At the one and half month mark he rather announced the fuel price hike. In essence, he was making it rain blood to get Nigerians so desperate they will embrace the fuel price hike in favor of refinery owners as the Presidency announced and oil marketers. It was an artificial scarcity and intentional suffering by Kachikwu’s own submission.
Read Ibe Kachikwu’s admission of Hoarding/Artificial Scarcity; Ibe:
“the government’s strategy is that whatever produced in the refineries will not go for sale but will be kept “in strategic reserve because the key problem here is that there is no reserve; anytime there is a gap in supply, it goes off…So, we’re going to dedicate the next couple of months to moving all the products that we produce to strategic reserve so that we can pile up reserves and that will push up the reserves in the nation.”
Robbing Peter To Pay Paul
While all this is happening, there is a winner in it all, the usual suspect: Aliko Dangote and the rest cabal. As soon as the fuel price hike was announced, oil marketer stock rose in the Nigerian Stock exchange, NSE. You can imagine how mad the Cabal have been and how they have been fighting their being cut out of the supply chain that made them billions. Stock for Dangote’s refinery depends on the price of fuel and the deregulation of the market.
The Presidency said as it admitted raising the price of fuel to shift funding to the black market, that the (de)regulation (Note: it is a regulation as there is a lower price hiked limit) will help aid refinery development; ie: will help Dangote and co.
Godwin Emefiele, CBN governor this January went to visit Dangote’s refinery and promised him unfettered access to dollars at the CBN rate for the $14 billion project. Dangote who the US call beggar-they-countrymen Dangote, has always benefitted at the peril of the masses. He gets free government land, cheap government assets, import duty waivers and cash. In return he sponsors corrupt politicians and bribes governors and Presidents, allegedly according to wikileaks cables, he gave Obasanjo a private jet and then he “rewards” the citizenry by giving them the highest cost for produce in the world. Dangote cement sells bags at 3x the global mean. That is our reward.
Nigeria is begging Buhari for just $3billion CBN rate dollars/year but Buhari would rather give same to one man, Aliko Dangote. No wonder why US calls him: beggar-thy-countryman; and why it’s so easy for Dangote to get richer while and directly proportionately to how the entire nation gets poor. Then he gives those destroyed and made into beggars by his corruption and corruption facilitated terror, food for a month.
Once again, Nigeria has chosen to raise his stock and preferentially give him dollars for his $14 billion refinery, in essence and by their own use of the word, subsidy, for giving CBN rate dollas, the Buhari government is again sucking up to corrupt Dangote and subsidizing his refinery by cheating or at the expense of 170 million Nigerians.
Dr. Peregino Brimah; @EveryNigerian