Friday, January 06, 2012

#fuel subsidy: do we have a cabal or a cartel?

My dictionary defines a cabal as “a secret political clique or faction”
A cartel is “an association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition”. OPEC, which Nigeria is a member of, is an example of a cartel.
Since the “consultation” on the removal of fuel subsidy began, a “cabal” was named as beneficiaries of fuel subsidy. (The polity’s love for everything secretive, occultic, and alarmist is another story).
The Nigerian Senate in December released the list of the “oil cabal” that torments Nigeria’s Israel. This list also includes the monies that were paid to these companies.
In his presidential media chat president Jonathan said this about the cabal; "oil cabal members are genuine businessmen. They are just like GSM service providers who are in business to make profit. They are not necessarily corrupt people and Nigerians must not perceive them as such."
This raises two questions- If they are businessmen who are in the market for profit why is the government blaming them? – they are in the business to make profits and they are not charity organizations? Second, if the government believes that these companies are making so much money off them, why not re-negotiate the terms of agreement?
In case, the presidency has forgotten, governments have leverages they can use to get what they want especially over businesses. It is time the government takes ownership of its inefficiencies and failures.  
While we are at it, this issue should be called by its proper name- fuel price hike/increase and not removal of fuel subsidy.

On another note, what is the government afraid of? And what’s with the endorsement hunting?

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