Afimag.com –
The problem of the removal of fuel subsidy in Nigeria has been a general talk across the country. On the other hand, fuel subsidy is a direct or indirect payment made by the government to private firms or individuals to offset the cost of importing petroleum into Nigeria.
Fuel Subsidy has been in place in Nigeria since the 1970s, as a response to the oil price shock in Nigeria. It began as a routine payment by the government to petroleum companies, to minimize the price of fuel in Nigeria. Fuel Subsidy exist, because the government fixes the price of petrol, and uses its resources to pay for the difference.
Fuel subsidy aids in minimizing the price of fuel for individuals to be able to purchase it. It also makes firms competitive. Fuel Subsidy frees the country from the pains and sufferings that come with fuel scarcity making Nigerians line up at petrol stations.
Fuel subsidy removal was officially made known to Nigerians by President Bola Ahmed Tinubu, during his inauguration, on May 29, 2023. This led to an increase in petrol price by almost 200 percent across the country.
Moreover, he said the decision to remove the subsidy will “free up for collective use of the much-needed resources, which had hitherto been pocketed by a few rich.”
President Tinubu further stated that the decision to remove the subsidy “is one… we must bear, to save our country from going under and take our resources away from the stranglehold of a few unpatriotic elements.”
While describing subsidy as “an elephant that was going to bring Nigeria to it’s knees”, he told the citizens that did the right thing by removing the subsidy, and that his administration operates an open door policy to accommodate individuals’ contributions.
Tinubu was greatly supported. According to Aliko Dangote, the expectation is that the removal of fuel subsidy will open up better financial capabilities for the country to invest in other areas such as education and development amongst the citizenry.
State Governors also expressed strong support for President Tinubu’s decision to end fuel subsidy payments in the country. They congratulated the President for tackling fuel subsidy behemoth, promising to work with him to ameliorate the short-term impact of the decision.
President Tinubu also gained supports from Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN). The association’s chairperson, Dame Winifred Akpani, said “The association would also support the government’s palliative measures by providing between 50 to 100 mass transit buses.”
She said, “The buses would be locally manufactured, and would use compressed Natural Gas as fuel. We pledge our support for President Tinubu in the bold decision of removing petrol subsidy. It is an idea that was long overdue. The removal of subsidy is not about making fuel costly and taking it out of the reach of Nigerians, it is about getting it right on the real issue of petroleum product subsidy. Who are those enjoying the subsidy? The subsidy ends up being enjoyed by those it was not meant for.”
Furthermore, Governor Dapo Abiodun of Ogun State, who led the DAPPMAN delegation, described the subsidy removal as a bold step that portended positive growth for the economy. He said fuel subsidy removal was a clear indication of Tinubu’s readiness to address the challenges of the oil and gas sector.
According to him, “Subsidy has become a N4 trillion per annum issue, and it’s removal will release more funds for economic development. Subsidy removal will unleash the potential of Nigeria, because it will open up a lot of resources for the development of other sectors of the economy.
“The National Economic Council (NEC) will soon begin sitting to propose interventions on the subsidy removal. The interventions will definitely be a long-lasting solution to the effect of fuel Subsidy removal on Nigerians.”
However, the Independent Petroleum Marketers Association of Nigeria (IPMAN), opposes Tinubu’s subsidy removal. The National Public Relations Officer, IPMAN, Chief Ukadike Chinedu, said the new government should dialogue with Marketers before taking the decision to remove subsidy. He stated, “We are not in support of the removal of fuel subsidy at this time. We have said it repeatedly that our refineries should be fixed before taking such decision that will cause galloping inflation, and inflict more hardship on the masses. The new government should sit and discuss with Marketers and other stakeholders on how to manage the fuel subsidy regime. We now have the Dangote Refinery, but all our refineries are still not working.
While IPMAN insisted that subsidy should not be removed without repairs of Nigeria refineries, the Major Oil Marketers Association of Nigeria (MOMAN), maintained it’s position that fuel subsidy should stop.
The Executive Secretary, MOMAN, Clement Isong, said Nigeria was it’s earnings by paying trillions as subsidy on petrol.
Therefore, the government should control the price of goods in Nigeria, increase the salaries of workers, provide grants to the less privileged people and students, and provide buses for public transport. This will help to reduce the effect of fuel subsidy removal in Nigeria.
IBOBO FAVOUR ADAEZE is a student of English Education Department in Delta State University, Abraka.
