Revisiting Oil Subsidy Removal: Implication on Working Class People

By
Adefolarin .A. Olamilekan
Political Economist & Development Research
Email: adefolarinolamilekan@hotmail.com
Tel: 08134232372, 08073814436
Are there hopes, safety and better living conditions for the working class people anywhere
around the world, particularly in Africa and specifically Nigeria? The question remained fresh
and doubting if answer could be provided under the global capitalism persecution melted out to
the working class, as the bosses continued to accumulate every thing to themselves. Exploitation
and re-appropriating the gains of the sweat and labour of the working class has a fresh face in the
entire human relationship, and the revolutionary Vanguard must not succumb to it but engage it
seriously. It is a fresh face that want to incapacitate the working class with it savvy, streetwise,
connected and networking approach and very unafraid to bare it teeth through tears of rage.
Subsidy removal, especially oil subsidy removal crisis is a common phenomenon in Nigeria as it
relate to development among developing countries of the Third world. Some schools of thought
have viewed it in different perspective. For instance, the modernization school lead by Rostow
sees it as a crisis of backwardness resulting from unending and abundant traditional structures
which should move to modernity because they have vehemently withstood development. But we
ask? What kind of development modernity brings that only set in inferiority and low confidence
among the working class? Another school is the underdevelopment, which perceives the crisis of
development as having direct relationship with the expansion of global capitalism. This school of
thought concedes to the fact that, capitalism expansionist agenda create development crisis in
developing countries including Nigeria, where the labours of the workers are appropriated by the
capitalist. On the other hand, the dependency school views it as dependent, distorted and
conditioned development between the Third World countries and the advanced industrialized
nations. As pathetic as the school of thought project it findings, it very obvious that there is
imbalance in the relationship between First, Second and Third worlds, which in reference
hampered the wellbeing of working class people, not only in the Third World, but generally the
world over.
However, the Marxist political economy school (Mode of Production Perspective) looks at it as a
crisis of articulation of capitalist and Pre- capitalist modes of production and feels that attention
should be given to the dialectical relationship between internal and external process. While this
school was able to expose the dynamic and intrigues of development on the basis of human
relations to the means of production, it argument lay before us the tendencies of exploitation,
oppression, suppressing, appropriation and accumulation without redress by the bosses. This
school of thought will serve as a guide to the argument submitted by this writer on the topic
under peruse.

Oil is Nature gift to Nigeria and other nations endowed with and this working class should
consume it on the cheap. With all sense of commitment, a large follower of the issues of subsidy
removal in the oil sector is often backed and promoted by the organized labour/trade and other
mass movement within the civil society rejecting the government stance to deprive the working
class. As study shows, a tiny fraction of the citizens enjoy the subsidies and this nature gift to
masses.
One of the counter arguments against the removal of subsidies in Nigeria is that the issue of
subsidies on consumption of petroleum products is not real. What is happening is that our
downstream domestic petroleum product sector has nothing in common with international prices
of petroleum products as long as we cannot put our domestic refineries back into full operation
by using our local crude and labour force to produce needed products.
Also subsidy as a palliative measure is meant to help the working class live normal lives. Indeed
it is a social expenditure. Subsidy does not contribute to economic growth. It is desirable because
every country has to assist her citizens, developed or developing countries. In other word subsidy
is used to assist the beneficiaries from facing the full rigor of the economic impact of a
commodity or service, while government does this kind of a thing when it sees that the
purchasing power of the working class/ consumer is low. However, the administering of this
palliative measures is always a concerned that begat government insincerity and nonchalant to
the course.
Unfortunately, over the years the government as being busy subsidizing to the detriment of
working class and the economy by enriching the bosses. The inefficiency, corrupt activities and
paddy paddy arrangy in the downstream energy sector attest to this. For example, this point to
the fact that why government is not interested in crushing the cable behind the bogus and
quantum subsidies claims by the bosses. Not only that, the I dont care attitude showcase by the
government in repairing the four refineries to full production circle so that with full benefits of
our competitive and comparative advantages in terms of labour cost and in-country abundance of
basic raw material, remained an issues of contention and deliberate act on the part of the
government.
While the internal expediencies and external pressures, lead by the arrow head agents of global
capitalism, the Washington consensus promoters (i.e. the World Bank, IMF and other
development/donor partner organizations or agencies) continued their affront agenda to eliminate
fuel consumption subsidies. There prescription on this issue as left no one in doubt of nothing
but to inflict more hardship on the working class. Obviously our concern and what should be the
concerned of these neo-liberal agents is not how to make the working class comfortable in the
current state of poverty, if they really care, rather, it should be how to get us out of the state of
affairs, and into a paradise of working class emancipation that can afford unsubsidized petroleum
products.
In the early years of former president Obasanjo administration, he contended that subsidy may,
after all, be an economic waste. This thinking and perception may have informed his intensions
to stop subsidizing the product. In 2002, however, the effort proved abortive as the government
had to bow to pressures from organized labour and civil society group. Earlier in 2000 at the talk

with the nations labour leaders following the nationwide strike sparked off by the hike in fuel
prices, Obasanjo submitted that government subsidy on petroleum products has never made any
economic sense and never will. However, what played out was the insensitive of the regimes
not to see reason to revive the four national refinery, even when it has issues license for private
refinery, it look the other way when the greedy businessmen or license refinery developer took
advantage of it and becoming oil importer over night.
The 2012 occupy Nigeria is still very much fresh on the mind of working class, the nonchalant of
the Jonathan administration was challenge to high heaven. The government claims it cannot
sustain the subsidy claims by oil importer, shifting the burden on the working class. The one
week massive protest against the insensitive of that regime made it to swallow it words, although
there are reservation over the subtle manner the labour leaders surrenders the struggle when the
ovation was getting louder. The current Buhari regime has been using technical and strategic
price template to tactically play around the subsidy issues. While the government has made it
clear, that subsidy must be remove, the working class only await the full day of it birth delivery.
Nigeria with an estimated population of 170 million people, of which only a fraction enjoys the
subsidy, the goal of government must be to increase the proportion of working class who have
access to Petroleum products and by extension, any such subsidies (Education, Health, Pension,
Housing etc). However, strong opposition to sustenance of subsidy remained that is it conceived
that we will be able to afford subsidization of petroleum for much longer? Furthermore, who
decides when we draw the line? Obviously it is a firm belief that the argument against subsidy is
strong and well founded and that among government and bosses in Nigeria and other parts of the
world. Vividly it is there world against the working class people.
Abolishing subsidy on oil abruptly without adequate protection of the working class would be
disastrous socially, politically, economically and environmentally: therefore adequate domestic
supply, resuscitated of the four National refineries, concrete engagement and support of the
labour, trade union /civil society agreement and intensive public enlightenment among the
working class is a deal that must be on the table as subsidy is the only succor government can
give to the people, in this current hardship.
Avoiding time frame for removal of fuel subsidy is an option since economic indices may not is
favorable to the working class. If we plan to have a time frame, conditions in the economy
should show that an average condition of Nigerians have improved to be able to face the full
economic condition of market forces (invincible hand) to justify the removal of the subsidy. The
caveat here is that if the purchasing power and the welfare condition of the people can never
improved, under the faces of current global capitalism, as the so called market forces is a
manipulated invincible hand determine the prices, meant to suffocate the purchasing power of
the working class. Given the peculiar situation of the country, especially with the growing rate of
poverty, joblessness, downsizing and rightsizing the working class, the nation may be caught
between the devil and deep blue sea in the situation, should the subsidy be eliminated, Amandla!
(Power to the people).
This is an extract from an ongoing research subsidy in Africa: a political economy
interpretation. By Adefolarin Olamilekan