As the Muhammadu Buhari eight-year reign ends on 29 May, Nigerians continue to reflect on the various challenges faced in the petroleum sector and how it affected their livelihood.
During the electioneering period in 2015, Mr Buhari and his party, the All Progressives Congress (APC), criticised the incumbent government of Goodluck Jonathan for failing to solve the country’s unending petroleum sector crises.
At the time, Mr Buhari made a series of promises to Nigerians, which include fixing the nation’s moribund refineries, passing the Petroleum Industry Bill (PIB) within one year, ending fuel importation, addressing the corruption in the subsidy regime, among others.
To achieve these objectives, six months after he was elected president in 2015, Mr Buhari appointed himself as Minister of Petroleum Resources, a move that many Nigerians said would engender transparency and accountability in the nation’s opaque oil sector.
Addressing some select reporters in New York at the time, Mr Buhari said, “I will remain Minister of Petroleum. I will appoint a minister of State for Petroleum”.
According to him, the step was taken as part of efforts to sanitise the country’s oil sector, which is said to be bedevilled by corruption, massive fraud and crude oil theft.
Although the PIB was passed under his administration, the sector faced different challenges, including fuel scarcity disruptions that caused suffering for many Nigerians while fuel subsidies continue to gulp huge resources.
Failed Promises
Fuel Subsidy Removal
Mr Buhari, before his victory in 2015, had consistently opposed the fuel subsidy regime under the Peoples Democratic Party (PDP). He also called for a reduction in the prices of petroleum products amidst efforts by the Goodluck Jonathan government to deregulate prices and end subsidy payments. He said there was no such thing as “subsidy” and dismissed it as a scam used by government officials to steal public funds.
Earlier in January 2012, Mr Jonathan’s administration had announced the removal of subsidies from petroleum products, thereby, adjusting the benchmark price of petrol from N65 to N141 per litre. The move triggered mass protests, known as #OccupyNigeria, as hundreds of thousands of Nigerians took to the streets.
Following the protest that lasted some days, the Jonathan administration was forced to reverse the fuel pump price to N97. Just before leaving office in 2015, it was further reduced to N87 per litre.
In his campaign promises, Mr Buhari assured Nigerians there would no longer be payments of subsidy.
In December 2015, Mr Buhari’s government began its move against subsidy by scrapping the Petroleum Support Fund and declaring an end to the era of subsidy payment. The president and the Minister of State for Petroleum at the time, Ibe Kachikwu, assured Nigerians that even with the removal of the subsidy, the price of petrol would remain as low as N85 per litre.
Mr Kachikwu said the government could no longer pay the subsidy due to the fraud tainting the scheme, adding that the government would channel its resources instead into getting the refineries up, and saving the trillions of naira past governments squandered on fuel subsidy payments.
However, Mr Buhari took the nation by surprise a year later when his administration suddenly increased the price of petrol to N145 per litre in 2016, with subsidy payment still in place. The government persuaded Nigerians to accept the increase.
When fuel queues resurfaced during the Christmas and New Year celebration of 2018, the Nigerian National Petroleum Corporation (NNPC) said the landing cost of petrol was for months about N171.40 per litre, which is N26.40 above the official pump price of N145.
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At the time, the Nigerian National Petroleum Corporation (NNPC) and the fuel marketers traded blame on who was responsible for the scarcity, and it resulted in rising retail prices that averaged about N200 per litre in most states, except Abuja and Lagos where filling stations in the metropolis sold for N145.
In December 2018, it became evident that the government was quietly continuing with the subsidy regime and earmarked N305 billion for petrol subsidy in the 2019 budget proposal. But the administration did not admit it was paying for subsidy and introduced a new tagline for subsidy, calling it “under-recovery”.
“We have allowed N305 billion equivalent to one billion US dollars for under-recovery by the NNPC on Premium Motor Spirit in 2019,” Mr Buhari stated in his budget presentation speech to a joint session of the National Assembly.
