I support the removal of fuel subsidy with conditions attached for the government. I have known that fuel subsidy is giving corruption a legal garb. But IMF didn’t tell government the whole truth. For government that cares for its people, removing fuel subsidy should only be done after the following conditions are taken care of:
1- Repair the refineries. As long as the refineries are working, petrol will come at reasonable price to Nigerians. The transport, NPA, custom duty and throughput components of the price will be taken care of.
2- Stop importation of petrol- fuel subsidy is not the only way government wastes money. Fuel importation in the most corrupt and wasteful venture of the government. As at June 2021, Nigeria spent N1.09trn on fuel importation. It is the cause of the deteriorating value of the Naira and Nigeria’s biggest import, the cause of our balance of trade and current account deficits. In fact fuel importation is the major cause of Nigeria’s economic crisis. As long as Nigerians will buy fuel without subsidy, they will be subsidizing government corruption and inefficiency.
3- Address the macro-economic crisis facing the country especially exchange rate and food inflation. Life is unbearable for Nigerians and removing fuel subsidy that will increase price of petrol will add more hardship to Nigerians. Fuel price increase has negative multiplier effects on cost of rents, transportation, school fees and prices of goods and services. When Nigerians are down with excruciating economic problems why add more hardships on them by jerking up the price of fuel?
4- Provide effective transport system like rails, good roads and bus services. In Nigeria, only Lagos has public transport system, even at that Lagos does not have rail system. Abuja has no public bus system and the light rail only covers a small fraction of the town. You can live in Abuja for months without seeing the train because it covers few stops. Other Nigerian cities don’t have public transport system.
5- Improve salaries of workers. Even without fuel price increase inflation has made Nigerian workers paupers. Without commensurate increase in salaries people will be working for nothing.
6- Solve the deliberating security situation affecting the roads and villages. People have no livelihood because they can’t farm. People cannot connect with towns and do business because of insecurity. Bandits have overrun most states in the Northeast and Northwest and people can’t till their lands or rear livestock.
7- Reduce cost of bureaucracy. The minister of finance said government did not budget anything for fuel subsidy for year 2022. But ask her, how much does the government budget for maintaining political appointees and you will know that the government thinks of itself not the poor Nigerians. According to former CBN governor and former emir of Kano State, Malam Sanusi Lamido Sanusi, at least 70% government revenue is spent on officials.The money to be spent on the president, vice president, ministers and CEOs of parastatals and members of house of assembly is far more than the fuel subsidy they are talking about. That covers fat salaries, allowances, estacodes, new expensive cars and even planes. But they will not touch their welfare. It is the same at state levels.
If the government can address these it can go ahead and remove fuel subsidy, otherwise it will be punitive to make life unbearable for Nigerians. Even the rich are crying in today’s Nigeria.
Aliyu Nuhu: is a social analyst, he lives in Abuja.