After the last general election that ushered in the Government of President Bola Ahmed Tinubu, I never for once thought the country would receive a surprise package during the inauguration speech. Since I wasn’t invited to attend the occasion at the Eagles Square in Abuja, I glued to my radio set and internet facility to catch a glimpse of proceedings. As I followed the salutation and other nitty gritty of the speech, this part hit me like a volcano…
”We commend the decision of the outgoing administration in phasing out the petrol subsidy regime, which has increasingly favoured the rich more than the poor. Subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead, re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.”
This was not what the majority of Nigerians expected to hear. For me, the news hit me considering the economic situation of the time. After the speech, fuel stations in my town, which had been selling their products the previous day, shut their gates and stopped selling. When they later resumed sale, a litre of fuel skyrocketed to 500 naira to the amazement of many Nigerians.
Although the removal of the subsidy on fuel has tremendous benefits to the nation’s economy, the manner in which it was done showed a lack of empathy and consideration for the common Nigerian.
As I joined my peers to discuss the issue, the majority were of the opinion that it was an ill-timed policy while a few hailed the decision as a bold step in the right direction.
On my path, I believe the removal of the subsidy was good but should have been done in phases to cushion the effect on Nigerians. In phase one, public services like public transport facilities, government-owned pump stations and local refineries should have been first set up before the partial removal of the subsidy for six months. Thereafter, phase two would have involved the granting of friendly licences to business tycoons to woo them into the local refining of crude oil to create competition. With this achieved, fuel subsidy would have been removed completely without much hassle.
The above idea would have created a balance in the economy and assisted Nigerians to seamlessly adapt to the change. Well, the bathtub is already dirty but we can’t afford to throw the baby away with the dirty water. Hence, the need to analyse the effects of the subsidy removal and proffer a way forward.
*The major gain of removing the subsidy is the freeing of resources for other sectors of the economy. According to the Presidency, Nigeria was able to save $1.32 billion since May 2023 after the subsidy removal. The fear among Nigerians however is whether the funds will be judiciously used to cater for the populace.
*The subsidy removal also acted as an incentive for domestic refineries to produce more petroleum products and shift the attention of our economy from importation.
*With each state earmarked to receive aid and other palliatives from the Federal government to cushion the effects of the subsidy removal, more job opportunities have opened up, especially in the transport industry.
*Through the subsidy removal, there will be a reduction in the yearly budget needed to run the affairs of the country. This will help the country to cut down the cost of governance.
*On a funny note, the removal of subsidy has increased the level of daily exercise among Nigerians. Before the subsidy removal, Nigerians especially those in the working class found it difficult to exercise themselves through trekking but with the subsidy removal, many are resorting to trekking and bicycle use for short distance trips.
*Due to the subsidy removal, there has been an exponential increase in the prices of petroleum products. A litre of fuel now goes for around 600 naira as against 185 naira. The ripple effect of this has caused inflation and reduced the purchasing power of consumers.
*Social vices, crimes and protests have become the order of the day since the removal of fuel subsidy. With many Nigerians unemployed in the midst of the current hardship, they are tempted out of a quest for survival to be involved in activities capable of frustrating the peace of the nation.
*The subsidy removal has reduced the standard of living of many Nigerians as many now scavenge to survive.
*There is an increased rate of mortality among Nigerians in current times. Since people don’t have enough to pay for their health care, they succumb to death in the process.
The way forward
*Since the fuel subsidy removal increased the cost of living for many Nigerians, there is a need for the government and employers of labour to increase the minimum wage of workers to enable Nigerians to cope with life.
*Friendly petroleum refining licences should be granted to investors to boost local production and make crude oil products readily available for all. This competition in the long run will lead to a reduction in the prices of petroleum products.
*Government-owned petroleum station needs to be built across all communities in Nigeria to take the products closer to the common person. When this is done, the managers of these stations should be discouraged from hoarding the products but encouraged to sell at fair rates.
*Alternative means of transportation like electricity and solar-powered cars and trains should be made available for Nigerians. This will help in shifting our focus from petroleum products to renewable energy thereby, reducing climate change and creating environmentally friendly jobs.
*The provision of social amenities like schools and hospitals should become a priority for the government in this era of fuel subsidy removal. This could be achieved through the rechannelling of money saved from the subsidy to the above-mentioned areas to make life comfortable for Nigerians.
*Since wants are insatiable, Nigerians should be taught about how to use limited resources to satisfy their needs. This can be achieved through public enlightenment campaigns, internet, cooperative societies and the National Orientation Agency.
*Finally, special attention needs to be given to the agricultural sector to boost food production and ensure food security. This can be done through the provision of agricultural inputs and the promotion of dry-season farming across the country.