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When President Goodluck Jonathan removed the petrol subsidy on January 1, 2012, the price of the product rose from N65 to N140.
At the time, the government said the subsidy was costing the equivalent of more than $8bn per year. It advocated for the money to be spent on infrastructure and social services.
“It’s not a question of making more money for the government,” then Finance Minister Ngozi-Okonjo Iweala said. “It’s a question of, where can the money have the most impact? Is it truly getting to those it’s supposed to help, or would it do better delivering services that people don’t have? Would it also lead to more job creation if it were used in a different way?”
But nobody trusted the government to manage the resources efficiently and a protest, championed in part by labour union leaders, broke out in parts of the country. At least one person was shot in Lagos as protesters shut down petrol stations, formed human barriers along motorways and hijacked buses. A union leader, Oladipo Fashina, described the move as “immoral and politically suicidal” and urged Nigerians to resist “with everything they have.” Some protesters carried a mattress with the words ‘kill corruption not subsidy.’
After about a week of protests, President Jonathan cut down the increase to N97, citing “the hardships being suffered by Nigerians.” Soldiers were sent into the streets and the protests quietened. Labour leaders claimed a pyrrhic victory.
But Jonathan didn’t just shift ground on price. He also mandated the EFCC to commence an immediate probe of fuel subsidy payments made to oil marketers in the country.
Few days after the mandate was given, an investigation led by lawmaker Farouk Lawan found a discrepancy of more than $4 billion a year between the amount of petrol Nigeria subsidises and actual consumption.
“What we have here is that 59 million litres were discharged by vessels, but the daily consumption locally was 35 million litres,” Mr Lawan, who has now been jailed for bribery, said at the time.
“There is a gap of 24 million litres per day being funded by Nigerians as subsidy that was not utilised by them. This of course amounts to overpayment; or in other words, sharp practises.”
The EFCC, since 2012, has charged several entities to court for fuel subsidy scams. Last year, the Commission said it had identified about N70 billion worth of fuel subsidy fraud but had only been able to recover N20 billion. “We are working to recover the rest,” EFCC chief Abdulrasheed Bawa said after testifying in a fuel subsidy case involving an oil firm, Nadabo Energy. The EFCC charged Nadabo to court in 2015.
Meanwhile, a decade later, Nigeria still can’t agree on how much fuel it consumes. In August 2021, the NNPC said it supplied 49.43 million litres daily but even its CEO, Mele Kyari, has admitted that some of that consumption is being trafficked to neighbouring countries where the price of petrol is much higher. In January, the Nigeria Governors Forum said there “is a lot of fraud in the consumption and distribution figures.”
This week, the House of Representatives set up an ad hoc committee to investigate and determine the actual volume of petrol the country consumes.
Of course, another committee, another dance. But, who benefits?