A political economist, Pat Utomi, has described the Nigerian National Petroleum Corporation Limited as one of the most opaque and unreliable institutions, adding that the government must “purge” the organisation to be able to deal with its issues.
He stated this on Thursday evening during an interview on Channels Television Politics Today program.
Utomi, who was speaking on the recent hike in fuel pump prices, said the typecasting of subsidy had put the country in the current state it is, pointing out that while countries like the United States and Europe subsidised for production, the country had engaged in “subsidised consumption for pleasure”, without proper management of resources.
He stated that the clean-up of the NNPC would reduce the corruption in the subsidy arrangement by 60 per cent, adding that he would ensure the clean-up if given the job.
“I think that the typecasting of what a subsidy is has put us in a bind. I probably would have begun by trying to clear up the mess in the industry, the NNPC. Believe me, the NNPC is one of the most opaque and unreliable organisations in the world. Quote me any day. The first thing is that you clean up the NNPC, and you will reduce the so-called subsidy by more than 60 per cent by just cleaning up the corruption in the NNPC. If I’m given the job, I can do it.
“Then you have to make a choice about strategic use of resources. Look, on its own, subsidy is not a good idea. But there are times when to drive production, to keep quality of life at certain levels, you commit to some level of subsidy. We know that agriculture is massively subsidised in the US and Europe.
“But this is a subsidy that drives production and puts therefore, more money in the hands of some people who produce, and therefore enables the system to keep running. But when you massively subsidise consumption for pleasure, when people don’t have to give thought to how they use the resource, then you are not doing what is best for the system. This is where we are stuck. Subsidy is back. Anybody will tell you that.”
Utomi also alleged that what the country referred to as subsidy was smuggling, noting that figures post-COVID-19 showed that Nigeria’s consumption had doubled, adding that it was essential to clear the corruption in the system before citizens would be punished with hiked prices.
“What we call subsidy, a good part of it was obviously graft, what we call smuggling. I mean, if you look at the way the numbers oscillate, how much we consume, look at what we consumed just before COVID-19, and then when movement drooped under COVID-19, the numbers just multiplied significantly. Before we punish citizens and pass on inefficiencies to them in terms of prices, we must clear out the corruption in the system. That alone, I think, will bring the thing down dramatically”, he said.
