SWL Statement on the Removal of the Fuel Subsidy

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  1. The federal government of Nigeria and its supporters back the 300% increment in the pump price of Premium Motor Spirit (petrol) with the argument that the country is groaning under the burden of subsidy, for which N3.4trillion was set aside for just the first half of 2023. They declare that it is the rich people with several cars who benefit from the fuel subsidy removed a few days ago, and not the poor masses. 

Monies being spent on the subsidy regime they say, is much more than what government spends on health and education. The monies saved with the removal, they claim, will be used to make life better for the poor people. 

Similar to General  Muhammadu Buhari (rtd) saying “if we do not kill corruption, corruption will kill Nigeria”, Vice President Kashim Shettima has come out to say that the fuel subsidy will get rid of Nigeria if their government does not remove it. But these claims are at best half-truths that hide big lies. 

  1. It is a statement of fact that a significant amount of the subsidy funds is used to subsidise corruption. Similarly, while diesel and kerosine have both been deregulated with no subsidy on them, this has not translated into gains that benefit the people. It is thus wishful thinking to assume that the removal of the fuel subsidy would in anyway translate into improved funding of social services that the working people would benefit from.

We thus reject steps taken that make poor working-class people suffer because successive governments cannot stop the corruption built into the subsidy regime. 

It is equally a demonstration of the failure of the Nigerian state that its governments have failed for decades to enable local refining and thus save the situation of being at the mercy of international pricing for petroleum products. 

The claim that rich people with cars are the main beneficiaries of the subsidy regime is both simplistic and false. The cost of fuel for transportation has multiplier effects on virtually every aspect of our society. 

Over the last few days, scores of thousands of Nigerian workers have had to trek to work or at least part of the distance to work because transport fares have skyrocketed beyond their reach. The prices of foodstuffs which were already becoming unaffordable are set to shoot through the roof. Millions of working people are also going to become homeless or be left with no choice but to move further into squalid accommodation spaces with landlords all set to put sharp increases in house rents into effect. 

  1. Socialist Workers League thus considers the recent draconian increase of fuel pump prices, in the name of removal of the fuel subsidy a major attack on working-class people in Nigeria. This shows that the new APC government of Bola Tinubu is no different from that of General Muhammadu Buhari (rtd), in its readiness to break the backs of the people with policies that make living more difficult. Indeed, this act signals the emergence of an even more ruthless regime in defence of capital over the people. 

The manner in which the increase from N185 to upwards of N557 was implemented, a clear month ahead of when the allocation for the so-called subsidy would expire in the 2023 budget, also confirms that treachery flows in the bloodstream of all sections of the ruling class. When petrol stations jacked up their prices on 30 May, barely 24 hours after Bola Tinubu said “subsidy is gone” in his inaugural address, many apologists of the regime claimed that the petrol stations were acting in a knee-jerk manner which was uncalled for because Tinubu did not mean immediate removal of the subsidy. 

But this was the same way the Goodluck Jonathan administration gave the impression that it would not be increasing fuel pump prices until the end of March 2012, only to do so on 1 January 2012. In both instances, the aim was to throw working-class people and their organisations, particularly the trade unions, off guard and thus weaken the possibilities of resistance. And in this current case, the seeming gaffe of the new president was also meant to test the waters. 

  1. We recall that during the 2012 “Occupy Nigeria” general strike and mass protest, politicians from opposition parties that would later merge to form the APC were very vocal in condemning the fuel price hike and also joined the trade unions and civil society organisations at the barricades. One of the most prominent of these politicians was Bola Tinubu, whose first major task on becoming president of the federation eleven years later was to do exactly what he stood up against with the working people. 

We also remember that this seeming standing up for the people, is the singular most important basis for the emergence of Major General Muhammadu Buhari (rtd) as president of Nigeria, on the platform of the APC. However, It is no surprise to revolutionary activists that once in power, the APC went back on their supposed concern for the poor masses. This is because, just like Goodluck Jonathan and the PDP, their primary aim in aspiring for power is to further the exploitation of working-class people and entrenchment of neoliberalism in the interest of the rich capitalists.  

  1. It is logical that locally refined petrol, particularly when this is refined by state-owned refineries would be cheaper than selling crude oil and then importing refined petroleum products. The Nigerian state which could not put its acts together to ensure refining supported the billionaire businessman Aliko Dangote to build a refinery. And the fuel pump pricing is being jacked up before the Dangote refinery commences production to ensure super-profits for the billionaire. This is a clear demonstration of putting the profit of a handful of billionaires before the well-being of scores of millions of working-class people.

We also make bold to challenge the myth that subsidising products to help alleviate the impact of the rising cost of living is wrong. Even in the Western heartlands of neoliberalism, European governments are currently subsiding energy costs for residents in the wake of the war in Ukraine. And the United States continues to subsidise its farmers and cushion the impact of the current global crisis with grants to families. 

  1. We take note of the fact that the removal of the fuel subsidy as a neoliberal bogeyman is a position shared by all sections of the ruling class. The presidential candidates of the three major parties were all for this removal during their campaigns and since the declaration by Bola Tinubu on the 29th of May, none of the other two has made a statement condemning the fuel price hike.  

There is an ongoing effort to build a hegemonic consensus around their aim, presenting a “there is no alternative”  to the removal of fuel subsidy narrative. This must be countered by working-class activists and radical youths. We must debunk the snake oil that middle-class mainstream media personalities are selling us that “the economic pain the masses will bear, is going to be just for a short while.”

We have been hearing this same story in different ways for decades, particularly since the introduction of the structural adjustment programme in the mid-1980s. But things have only got worse for the poor masses, whilst the rich get richer at our expense. 

We must also take our argument forward showing the interconnection between the pricing of fuel and the political economy of our livelihoods. We cannot be talking about the deregulation of fuel pump prices when workers receive a miserly N30,000 minimum wage. Some of the conditions precedent to addressing the fuel subsidy regime are:

  • Identifying the subsidy component that goes into greasing the huge pockets of people in big business and government, and all those who have thus benefited brought to book;
  • Implementation of a living wage the national minimum wage. Looking at the current cost of living the national minimum wage cannot be less than N100,000 for a worker to live on it. Subsequently, a sliding scale between the cost of living index and the national minimum wage must be put in place to enable automatic increments where necessary, on an annual basis;
  • Putting social protection measures in place for working-class people, including those in the informal economy. And these must emerge from social dialogue with the federations of the trade unions and informal workers’ organisations. 
  1. The Nigeria Labour Congress and Trade Union Congress must grasp the political significance of this moment, as they call for a general strike. There can be no room for compromise. As a presidential candidate, Tinubu had arrogantly said he will remove the subsidy and nothing will happen, adding that no amount of protests will make his administration reverse the action. The trade unions must provide leadership in showing that the power of the people is greater than the people in power. Workers’ power, now more than in 2012, now more than ever, must be brought to bear on the turn of history and to defend the interests and well-being of working-class people. 

Frances AKINJOLE, National Chairperson and Mobolaji OTUYELU, National Secretary

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