Fuel subsidy removal and citizens’ burden

The recent increase in the pump price of fuel not only shocked but dismayed many Nigerians. Coinciding with hike in electricity tariff meant double jeopardy for longsuffering citizens. The Federal Government raised the ex-depot price of petrol from N138 to NN151.56 per litre in September.


The announcement had scarcely been made when marketers increased the pump price from N148 to between N158 and N162 per litre. Expectedly, the price adjustment has elicited outrage from not just citizens but the organised labour. The Nigeria Labour Congress (NLC) asked Federal Government to revert to the N121 price that fuel was sold during the COVID-19 lockdown. The consequences of the increment are dire.


Prices of goods and services are already skyrocketing. Indeed, master bakers had increased prices of bread by as much as N50 per loaf, and it is left to the imagination what would happen to other food items which the poor subsist on.


The NLC was not unmindful of increased hardship for Nigerians when it said in a statement: “It is disheartening that despite the gale of opposition by labour and Nigerians to the previous hike in the price of petrol, government went ahead to add scorpion to the scourges on the back of Nigerians. This is indeed a whole new level of government insincerity and insensitivity….”


Calling on hapless Nigerians to make sacrifices is not out of place so long as those making the call are not excluded from making such sacrifices. But quite clearly the ruling elite are unwilling to let go off their subsidised lifestyles. This class of Nigerians continues to be beneficiaries of government patronage not to mention corrupt enrichment and looting of the collective patrimony while insisting that subsidies for the poor be removed.


This is one of the reasons for the opposition to this latest talk of removal of fuel subsidy and indeed all previous such talks. The NLC captured it aptly when it said: “It is sad that while poor Nigerians are being pilloried by the government of the day with obscene fiscal burdens, those connected to the highest echelons of political power are daily amassing public wealth and rubbing their illicit loot on our faces.


Hobbesian state of living appears to be the perfect metaphor for the state of affair today in Nigeria….” Howbeit, the Federal Government has said that there is no going back on the removal of fuel subsidy.


President Muhammadu Buhari noted that it would be irresponsible to borrow to subsidise fuel. Speaking through the Vice President, Prof. Yemi Osinbajo, Buhari stated that following the drastic reduction in revenue and the consequent review of the 2020 budget, it became evident that government could no longer afford the subsidies on petroleum products and electricity.


The president also said that the money saved would be used to provide infrastructure. Ironically, it is the same Osinbajo who, in 2016, openly declared that  fuel subsidy had been removed. So, the question to ask is if fuel subsidy was removed four years ago, which subsidy are they removing this time?


Again, the promise of using money saved from subsidy removal to provide much needed infrastructure is neither here nor there because history does not support it. It is precisely because of this seeming deceit and lack of transparency that Nigerians find it difficult to believe whatever government says. Government has foreclosed on removal of subsidies on fuel; fair enough. The issue has become like a phoenix that keeps rising every once in a while.


Many Nigerians are tired of the periodic threat of fuel subsidy removal and would want it gone so they have peace. However, it must be emphasized emphatically that at no time in the future should government talk about subsidies again. Nigerians have shown resilience in the face of unrelenting governmental onslaught for years and their ingenuity will once again come to their rescue.


We also want to state categorically, that at no time in the future should we hear that subsidies were paid to some shadowy individuals. Government must manage the entire process in such a way as not to leave doubts about its sincerity and competence. For instance in the aftermath of the recent removal of subsidies, depot owners and marketers increased prices.


Marketers who still had old products raised pump prices immediately, selling old stocks at new prices, thereby making a kill. The Petroleum Pricing Regulatory Agency could have at the very least insisted that marketers couldn’t increase pump prices for another three days so as to exhaust their old stock.


The suggestion in certain quarters that some officials in these government agencies are also marketers and are therefore direct beneficiaries of the profiteering can’t be easily dismissed.

And since government is talking about market forces determining prices of fuel and deregulation, we should go the whole hog. Government can no longer import fuel or surreptitiously pay subsidies to anybody.


Also, businessmen like Aliko Dangote who have shown interest in entering the refining business should be given the needed encouragement to quickly complete their refineries. That would definitely help the entire petroleum refining process. Modular refineries owners should also be encouraged.


They’re licensed but are not operating at the moment. What is stopping them? Government can also help to get them off the ground. Finally, Nigeria has to end the importation of petrol. All efforts should be geared towards this goal. Our refineries are idling away and constitute a drain on scarce national resources.


The option of handing them over to private investors to manage so as to stop the haemorrhage since government is unable to manage them should also be given due consideration


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