*Prof. Pat Utomi, a renowned political economist, though advocates some level of subsidy in the economy, describes the Nigerian National Petroleum Company Limited as one of the most opaque and unreliable institutions, for massively subsidising 鈥榗onsumption for pleasure鈥�, noting the state oil firm is not doing what is best for Nigerian consumers

Isola Moses | 绿帽献妻

Against the backdrop of the recurrent fuel crisis in the West African country, Prof. Pat Utomi, a political economist, has described the Nigerian National Petroleum Company Limited (NNPCL) as one of the most opaque and unreliable institutions.

绿帽献妻 reports Prof. Utomi, an ex-Presidential aide and former Presidential Candidate, who stated this Thursday, September 5, 2024, while featuring in an interview on Channels TV, monitored in Lagos, said the Federal Government must 鈥減urge鈥� the organisation to be able to deal with its varied operational issues.

Speaking on the current petrol price hike and overall energy crisis in the economy, the expert noted typecasting of subsidy had put Nigeria in the current state it is.

In regard to the far-reaching implication of high inflation in the economy, it is equally noted that Nigerians are already struggling with higher living costs after the Federal Government reforms to end a fuel subsidy and free the Naira currency drove a spike in inflation.

Utomi, however blamed the political class for the pains experienced by Nigerian consumers lately.

He asserted: 鈥淣igeria鈥檚 political class is responsible for the Nigerian misery. The political class has failed the country.鈥�

According to him, while countries, such as the United States (US) and Europe subsidised for production, Nigeria has continued to engage in what he described as 鈥渟ubsidised consumption for pleasure鈥� without proper management of resources.

Utomi also advocated the overhaul of NNPCL to reduce the corruption in the subsidy arrangement by 60 percent.

He further assured that he would ensure the clean-up of the state oil firm, if given the job.

He stated: 鈥淚 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. 鈥淏elieve me, the NNPC is one of the most opaque and unreliable organisations in the world. Quote me any day.

鈥淭he first thing is that you clean up the NNPC, and you will reduce the so-called subsidy by more than 60 percent by just cleaning up the corruption in the NNPC. If I鈥檓 given the job, I can do it.鈥�

Utomi also noted that 鈥測ou have to make a choice about strategic use of resources. Look, on its own, subsidy is not a good idea.

On essence of 鈥榮ome level of subsidy鈥� in economies

Prof. Utomi said: 鈥淏ut 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.鈥�

He submitted: 鈥淭he first thing to do is to recognise essential things that Nigerians need fuel for. I will subsidise those things.

鈥淭here will be a subsidy. The Americans have subsidy for Agriculture, it is a matter of where you direct it to.鈥�

The scholar, in the interview, said: 鈥淏ut 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.

鈥淲hen you massively subsidise consumption for pleasure, when people don鈥檛 have to give thought to how they use the resource, then you are not doing what is best for the system.

鈥淭his is where we are stuck. Subsidy is back. Anybody will tell you that.鈥�

Utomi as well alleged what Nigeria referred to as subsidy was 鈥渟muggling鈥�.

Figures post-COVID-19, he stated, indicated that the country鈥檚 consumption had doubled.

He said that it was essential to clear the corruption in the system before energy consumers would be punished with hiked prices.

He further explained: 鈥淲hat we call subsidy, a good part of it was obviously graft, what we call smuggling.

鈥淚 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.

鈥淏efore 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鈥�, he said.

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