Fuel subsidy removal: A layman’s analysis

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Though Dangote has said it all, that “fuel subsidy removal is a foregone conclusion”, we the citizens of the Federal Republic of Nigeria are at liberty to express our feelings on this issue that is bound to bring us hardship and worsen our situation.

I am not an economist so I won’t draw some fancy scales explaining what will happen if so and so happens, I rather prefer to explain it in a layman’s language with the hope that one of the I.M.F agents in Nigeria looks at the issue from our (masses’) own perspective and advise I.M.F to reverse their instructions, that Nigerians should cease to enjoy fuel subsidy because I am not convinced that any Nigerian can advise that fuel subsidy should be removed in this ‘hard times’.



Experts have forecast that when fuel subsidy is removed a litre of fuel will cost at least N140.It can be said that every home in Nigeria uses fuel, if not in their vehicles then for a power generating set which has become a necessity for all who can afford to buy one, because the power supply situation in Nigeria is nothing to even think about writing home about, in other words hopeless. An average power generating set consumes about 5 litres for it to work for about 6 hours daily; 5 litres presently cost N325 and will cost N700 when the subsidy is removed. Over 50% of Nigerians own cars and motorcycles that are fuelled by P.M.S (petrol), though a press statement attributed to the minister of petroleum argued that “the masses travel on big mass transit vehicles which run on diesel”, they also claimed that buses in places like Lagos, convey workers to and from their work places. What they failed to take into consideration is the fact that Lagos is just one state out of the 36 states that constitute Nigeria and a survey based on Lagos alone no matter how reliable cannot justify fuel subsidy removal for the whole country.

Anyway most cars used by average Nigerians consume about 60 litres of fuel weekly, which presently costs N3,900 and about N15,000 monthly. The removal of fuel subsidy however will increase the fuel expenses of average Nigerians who fill their tanks once a week to N8,400 and about N33,000 monthly.

Had it been that fuel subsidy removal will only affect the price of fuel itself there won’t have been much problem, but its removal will trigger a rise in prices in the Nigerian markets. Food, clothes and all that human beings need for survival will triple in prices. Nigerians are already barely managing to cope with the price rise that the news of the unimplemented minimum wage increase caused. The proposed fuel subsidy removal by the Nigerian government is a political miscalculation that might end up throwing Nigeria into chaos never before witnessed in Africa.

Some political jobbers are trying to convince the government that they have carried out consultations with the people, and that fuel subsidy removal can go on as planned. But President Jonathan needs not to look far for peoples opinion on the issue, let him just read the comments posted to him by Nigerians on his Facebook page and he will know how unpopular this subsidy removal issue is with Nigerians. Stimulating economic growth and ensuring effective penetration of developmental projects is a good policy, but the economists and other specialists that came up with the idea of fuel subsidy removal should use their vast knowledge and sophistication to look for another alternative in the interest of peace and democracy.

Adamu is publisher of Northern Wind


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