By Farooq A. Kperogi
Apparently, the omniscient, omnicompetent “invisible hand” of the market has suddenly developed an infirmity that requires the helping hand of the Nigerian state. After more than three years of publicly treating petrol-price intervention as economic blasphemy, President Bola Ahmed Tinubu has authorized the Nigerian National Petroleum Company to surrender its retail profit margin for a month so Nigerians can buy petrol more cheaply.
What happened? I thought petrol subsidy was an abomination. I thought the market, left to its own devices, would work its magic and lead us into an economic El Dorado. I thought the government had no business interfering with the full, fierce, forceful fury of international oil-price fluctuations, even when the fluctuations immiserate the people whose wellbeing is the primary reason governments exist.
In an October 8 statement, the presidency announced that NNPC Retail would sell petrol at cost for a limited period. If the landing cost is ₦1,300 per liter, NNPC says that will be the selling price. The government is also negotiating a ₦1,350 ceiling on the ex-gantry or landing cost of petrol, with refiners and importers expected to recover any temporary shortfall when prices fall. It promises forward crude sales to domestic refineries, a strategic fuel reserve, expanded cash transfers and other interventions.
Neither figure guarantees a nationwide pump price. NNPC clarified on October 9 that its discount will run until October 31 at its retail outlets. For me, that is a damp squib, as the British call a hype that doesn’t live up to its promise, because a 30-day reprieve, however welcome, is not the same as durable affordability.
Unlike neoliberal evangelists and their unthinking converts who regard suffering as an indispensable sacrament of “reform,” I welcome the intervention, however disappointingly transitory it is. I have never believed that a government should stand akimbo and watch citizens smolder in the ferocious fury of brutal market forces.
Petrol in Nigeria is not an optional luxury. As I have repeatedly argued, its price affects transport fares, food, electricity generation, school attendance, medical care and the survival of small businesses.
What interests me more than the concession itself is the ideological edifice it has begun to bring down.
On September 30, 2023, I wrote a sarcastic column titled “Thought Subsidy Was Bad. Why is Tinubu Bringing it Back?” A Daily Trust investigation had reported that the government spent ₦169.4 billion in August to keep petrol around ₦620 per liter despite Tinubu’s “subsidy is gone” proclamation. I asked why Tinubu was committing “economic blasphemy” by doubting the efficacy of the Invisible Hand.
My sarcasm was directed not at the assistance but at the hypocrisy of those who had declared assistance an economic sin. I wrote then that the problem with petrol subsidy was the monstrous corruption associated with its administration, not the principle of assisting people. A government that cannot punish subsidy thieves whose identities it knows should not convert its failure into a punishment for everyday folks.
Three years later, we are back to the same theater of absurdity. The presidency is bending over backwards to assure Nigerians that this intervention is neither a subsidy nor a price control. NNPC has issued its own statement insisting that its discount “does not represent the reintroduction of petroleum subsidy.”
Why this hysterical semantic defensiveness? The answer is obvious. It’s because Tinubu’s government has become a victim of the success of its own propaganda.
For years, the Nigerian political and economic elite worked overtime to turn “subsidy” into what rhetorical scholar Richard Weaver called a “devil term,” that is, a word programmed to provoke instinctive disapproval. Linguists call a related process “semantic derogation,” through which a neutral or positive word acquires negative associations.
Subsidy, which basically means assistance extended to reduce a burden, was transformed into a synonym for theft, waste and economic backwardness.
What is inherently bad about government assistance? Why is it noble to subsidize politicians’ sybaritic lavishness but ruinous to help ordinary Nigerians get to work, transport their produce or keep their businesses alive? Why are bailouts for the rich enlightened economics while assistance to the poor is an unforgivable crime against the invisible hand?
The demonization of subsidies was never an innocent exercise in economic education. It was an engineered mass hypnosis that persuaded even its victims to celebrate their own dispossession and piecemeal annihilation. It successfully turned the mass economic strangulation of the people into a hegemonic moral consensus. People who would be the first to perish in the economic fire of this stupid, wicked policy applauded the people lighting it.
I warned in several past columns that the proof of the pudding is in the eating, that the manufactured consensus that demonized subsidies would eventually collide with the material realities of people’s lives and then unravel. That is precisely what is happening.
Some people who insulted me for opposing petrol subsidy removal now concede that they were foolish to believe that the subsidies did not benefit poor Nigerians. Reality has become a more effective teacher than the righteous outrage of implacable opponents of the withdrawal of subsidies like me or the dishonest, self-interested sermons of the high priests of neoliberalism.
Notice that this is no longer merely a quarrel between Tinubu and his critics. In 2023, Tinubu, Atiku Abubakar and Peter Obi all supported petrol subsidy removal. They were essentially united on the supposedly sacred principle that government assistance for petrol consumption must end.
Now Atiku promises to restore a targeted subsidy, including cheaper crude for domestic refineries. Obi, who as recently as August defended subsidy removal, said in an October 6 BBC interview that he would remove the corruption and retain the subsidy. Tinubu, meanwhile, has embraced temporary discounts and negotiated pricing arrangements while frantically insisting that he has done nothing of the sort.
I do not mistake politicians’ conversions for sudden moral enlightenment. Elections concentrate the mind when voters have been roasted alive by purportedly “courageous” reforms. But their retreat is important because it shatters the fiction that there was no alternative to abandoning Nigerians to the cold, cruel, calculating hands of the market.
I recognize that there are real distinctions between a direct treasury-funded subsidy, a public company forgoing profits and a temporary ceiling that allows suppliers to recover losses later. Calling everything a subsidy obscures these differences. But calling a government-negotiated ceiling “not a price control” cannot conceal the obvious fact that the government is intervening to prevent market prices from being passed straight through to consumers.
If intervention is now permissible, why must it last only one month? What happens to a worker after October 31? At ₦1,400 per liter, Nigeria’s ₦70,000 minimum wage buys only 50 liters. Even the presidency’s illustrative ₦1,300 price would buy fewer than 54 liters. Four extra liters do not reverse three years of accelerated impoverishment.
In my last Saturday’s column titled “World Fights Costly Petrol. Tinubu Defends It,” I showed how governments across the world were cutting fuel taxes, capping prices, releasing reserves and otherwise protecting citizens. Five days later, the Tinubu presidency announced versions of several of those measures.
I am not claiming my column caused the retreat. The point is that Nigeria has finally acknowledged what other societies have long understood, which is that the market is an instrument of economic organization, not a bloodthirsty deity to which human lives must be sacrificed in the name of “reforms.”
And we must still ask the fundamental question about why an oil-producing country must price the petrol its citizens consume as if its domestic crude has to be exported and repurchased at international prices? Where are the transparent calculations of production, refining, distribution and reasonable profit? A month of margin surrender does not settle that question.
The old neoliberal consensus is cracking because people cannot eat promises. It is collapsing like a house of cards because people cannot fuel generators with “reform” slogans or pay transport fares with mendacious sermons about deferred prosperity. A government worth the name exists to protect living human beings, not to keep an economic dogma alive after its consequences have become nakedly transparent and intolerable.
Let Tinubu call his concession a discount, a margin adjustment or whatever euphemism makes it easier for his ideological cheerleaders to sleep at night. Nigerians are not obliged to participate in the semantic gymnastics. What matters is relief from extortionate petrol prices and the exposure of the fraudulent premise on which Nigerians were told to endure avoidable existential torment.
