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Still on fuel subsidy

Still on fuel subsidy
January 28
15:39 2022

The federal government announced what I knew was going to happen all along with the suspension of fuel subsidy. The government tactically threw the burden of fuel subsidy to the next administration.

When the government announced that it will stop the subsidy regime in June, I knew it was just mere talk as the situation on the ground is not conducive to the removal of subsidy.

No doubt, spending trillions of naira on fuel subsidy is not sustainable when most of the sectors in the country are in comatose shape. Imagine spending N1 trillion a year on the education and health sector in one year, imagine what that will do for those sectors.

Again, there is no guarantee that if you stop payment of subsidy, the money will go into infrastructure or some critical sectors, in Nigeria that money will go into some private pockets.

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The government was definitely caught between a rock and a hard place. Do you continue to spend trillions to subsidise fuel or remove subsidy and risk a massive protest? Something had to give.

In an election year, I think it will be foolhardy for the government to remove subsidy. It’s a sure way to lose the presidential election. No doubt, Nigerians are going through a lot right now, over 90 million Nigerians are living in extreme poverty. Inflation is double-digit, food prices are soaring every day in the market. Prices of goods and services have increased more than 100 percent in the last year.

Unfortunately in Nigeria, everything is tied to fuel price. An orange or groundnut seller on the road increases their prices at the slight increase of fuel. Even bride price increases when fuel prices are high. Women of the night increase their prices at the increase of fuel price.

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At N160-N165 per litre presently, majority of Nigerians are barely surviving. Imagine if the price of fuel goes up to N500 per litre. What will happen? I believe the #EndSARS protest would have been child’s play compared to the protest that would have happened. I don’t want to even think about the spike in the crime rate.

Sadly, some governors and economists are still speaking English, calling on the government to remove subsidy. Maybe they need to smell the coffee. Some governors are saying less than 10 states are benefiting from the fuel subsidy but they forget that the effect of fuel price increase will be felt in all the 36 states of the federation. The crime and poverty will be spread across the states.

To be sure, I support wholly the removal of fuel subsidy but the situation on the ground right now is not conducive for the removal. Wisdom is profitable to direct.

Successive governments have been blamed for not failing to fix or build refineries for the country. I am not going into another blamestorming here. What’s the way forward now? Right now, 200 million Nigerians are hoping on one man to offer relief to this soon and the man is not the president of the country. Nigerians are hoping that the coming of the Dangote Refinery will stop the payment of subsidies as landing costs and all will be eliminated. Good point.

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I believe more Nigerians should build refineries. State governments should be allowed to build refineries, states can collaborate or regions can decide to build refineries.

The federal government should sell the refineries. Pouring billions of naira into the refineries for turnaround maintenance, which most people call turnaround scams, has not achieved the desired results. Why continue the same thing all the time and expect a different result?

The first step is to purge the petroleum industry. We need to get accurate figures for fuel consumption daily. Senate President Ahmed Lawan and a majority of Nigerians do not believe we consume 100 million litres daily. It is impossible. Just like I don’t believe reports that 20 or 30 thousand policemen are deployed to a state for off-season elections.

If we can solve the corruption in the oil industry, it will significantly boost the nation’s revenue. But no government has been bold enough to investigate the daily fuel consumption and the production of the barrels. In Nigeria, once the sharing formula is acceptable by all involved, mum will be the word. But we can’t continue like this. Someone must have the cajones to do it.

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Definitely, for fuel subsidy, it will have to go sometime in the future but certainly not now.

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