The Other Side Of Fuel Subsidy Removal

TO most Nigerians, the expression “subsidy is gone” on the day of the inaugura on by President Bola Tinubu came as a surprise and a big disappointment. People conversant with the economic implica ons of subsidy removal and its consequences know that it will certainly bring untold hardships, hence their disappointment. But for others, since the opponents of the President are in court to contest his victory such a fundamental decision ought to have been deferred ll a er the Supreme Court pronouncement.

Whichever way these two categories of Nigerians felt, President Bola Tinubu thought otherwise. He felt and rightly so that he has been inaugurated and that he must hit the ground running. Hence, he took a decisive decision which his predecessors since 1999 couldn’t take. Some of these are General Olusegun Obasanjo and Major General Muhammad Buhari. The issue of subsidy has indeed become conten ous such that virtually all governments since the advent of the fourth republic have had to nker with the price of premium motor spirit a.k.a petrol.

This is because petrol rather than diesel and kerosene is the most consumed of the three. Diesel and Kerosene were deregulated which led to an increase in their prices yet the nega ve response wasn’t this high. Rather people revolt whenever the same was done to petrol. Besides the fact that the consump on of petrol for vehicles is high, we also need it to fuel genera ng sets in an economy where the electricity supply is unstable. Whereas most ci zens have objected to the aboli on of subsidy that has changed the trajectory, some Nigerians believe that if that cri cal decision was not taken on that first day, it would have been difficult. The other alterna ve strategy would have been what we are used to.

The government makes a par al with- drawal of subsidy, the people react negavely, the organized labor force goes on strike and the government is compelled to reduce the price.

Some of us felt something different was needed. Was the president jus fied in doing so?

Events around our economy show that Nigeria is in dire straits resul ng in borrowing to fund our budgets. Over 90% of revenue is also spent to service our foreign debt. Nigeria is now the poverty capital of the world with over 133 million in mul dimensional poverty.

Also, Nigeria is the only member of the Organiza on of Petroleum Expor ng Countries (OPEC) that imports refined fuel. Above all, our young, bright, and educated ones have chosen to go abroad in search of greener pastures.

Do we need to go through the same route as we have traversed before? This simply means doing something the same way and expec ng a different result.

Nigerians believe that crude oil is part of our natural resources hence we must enjoy its benefits in terms of its availability and affordability. They are jus fied because mismanagement of our economy has ensured that our refineries are coma-

“We can make the best out of the current travails by exploring other ways of doing things. For example, experts have suggested that Com- pressed Natural Gas (CNG) can be used as an alternative to PMS. Some people have changed the petrol carburetors in their generating sets to that of CNG which according to experts is cheaper and environmental-friendly” tose thereby resul ng in the importa on of refined oil with its cost implica on and other related hazards. Previous governments since Obasanjo, in spite of the large money spent on Turn Around Maintenance (TAM), haven’t made any of our four refineries func onal. Renowned economists like former Central Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi and the si ng governor of Anambra State, Professor Charles Soludo also an erstwhile CBN governor among others have posited that the subsidy regime is unsustainable. The candidates of the three major poli cal par es promised to do away with the subsidy regime if elected during the elec oneering campaign. President Tinubu said even though organized labor would go on strike, subsidies would be withdrawn. And he went ahead to do so. However, some ques ons were le unanswered. If it is true that the Buhari government budgeted and made provisions for subsidy ll June 2023, what happened to the budgetary alloca on for June 2023 when the subsidy was withdrawn a month earlier? Was the Dangote refinery built in four years, commissioned with fanfare by ex-president Buhari with 650,000 liters daily capacity of PMS not meant to augment the importaon of refined oil? The cumula ve capacity of our 4 refineries is 450,000.

Osun Defender

Publisher – Moremi Publishing House Ltd.

Deputy Editor – Ismaeel Uthman

Produc on Editor – Petkola Taiwo Ibitowa

Twin major policies were taken by President Tinubu to overcome the sharp prac ces a endant with the prevalent system. The wholesome withdrawal of subsidy and the floa ng of the exchange rate. Among other reasons, the president posited the subsidy had to go because some unscrupulous businessmen were profi ng from it as well as the fact that the product was smuggled across our borders to help our neighbors.

Reporter – Yusuf Oketola

Reporter – Kazeem Badmus

Photo Journalist – Shola Aderinto

Computer Graphics – Zainab Olalere

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While the dual exchange rate lasted, the government fixed the exchange rate of the dollar at less than N500 while the autonomous, or the Bureau De Change (BDC) dollar changed for close to N800. This resulted in round-tripping which meant people with the right connec ons accessed the dollar at the official rate and disposed of it at the BDC rate and made around N300 cool money on each

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