Revisiting fuel subsidy removal, economic hardship

Austin Uche-Ejeke

Last week, a large number of Nigerians gathered again in protest against the escalating cost of petrol, its scarcity, and general economic hardship in the country.

This time around, the protest was led by one Abdullahi Bilal with his two million march against the oil scam squad.

Suffice to state here that the genesis of the current economic challenges Nigerians are facing is rooted in the abrupt removal of fuel subsidy by the current regime on May 29, 2023, in the now infamous ‘fuel subsidy is gone’ pronouncement by President Tinubu.

Granted that payment of subsidy on fuel was a major pain in the neck of the country and the economy, and to that extent virtually everybody, including almost all the presidential candidates, agreed to remove the subsidy if they assumed power.

That the removal of subsidy is an idea for which time is ripe does not mean that the citizens that are supposed to benefit from such removal will be strangulated to death as a result.

The point must be made here that before Tinubu’s ascension to power, fuel was sold at N198 per litre, but as we speak now, fuel is dispensing at over N1200 in most states of the federation.

Also to be pointed out is that fuel in Nigeria is the major lubricant of virtually all the activities in the country. As such, anything that touches the fuel affects the whole country in a very significant way.

Farmers, transporters, teachers, students, workers, artisans, and all categories of people have one thing or the other to do with price and usage of fuel.

The farmers are affected because they need vehicles to convey their farm produce from one location to another, and vehicles that will facilitate the movement of goods are powered by fuel. This is particularly so in a country where we don’t have a functional rail system or efficient waterway means of transportation.

The same thing applies to artisans, who also need this fuel for their work. Barbers, headdressers, and pepper grinders need fuel to power their clippers, dryers, and machines for them to work. The same goes for other forms of crafts. This is caused by an inefficient and epileptic power supply that cannot provide adequate electricity for these craftsmen to function optimally.

Since fuel is the live wire of almost all the economic activities in the country, anything that touches it negatively always leads to restiveness, protests, and unrest.

This is because a high cost of fuel normally leads to a high cost of transportation, which affects virtually all the segments of the economy. It will affect workers and students, who will enter vehicles that will transport them to work and school, respectively. It will affect traders and farmers, who will use vehicles to transport their goods and products to the market and various destinations. As such, if there is an increase in fuel prices, transporters will automatically increase their fares, and the traders or farmers will have no choice but to increase the prices of their goods and services.

At the end of the day, it is the common man on the street that will bear the burden, as the cost of fuel will be passed to him.

Inasmuch as we all crave peace and tranquillity to reign in the country, the point must be made that a way-out ought to be sought to assuage this aggravated suffering that Nigerians are passing through now as a result of the high cost of petrol.

What the government should have done or ought to do now is to see that all four refineries are working. If they function optimally, the cost of fuel will not be that high as the burden of import duties will be removed and the price will be moderate.

The federal government should, as a matter of urgent national importance, see that the refineries are revamped or at best sell them to willing investors who will put them in order to produce fuel mostly for local consumption.

Also, the government should provide the necessary support and enabling environment for Dangote Refinery to function seamlessly and provide fuel for domestic use. All forms of bottlenecks, intimidation, frustrations, and blackmail should be eschewed for Nigerians to enjoy the benefits of having an indigenous refinery.

All things being equal, Dangote fuel shouldn’t cost more than N500 per litre, and this will go a long way in bringing succour and relief to the already traumatised Nigerians.

Most importantly, the president should have the political will to stop fuel importation. It may not be easy to do that because of the faceless, powerful cabal or the benefits people in power derive from fuel importation, but a true statesman who loves his country and the citizens should put the people first and above anything else. Fuel importation drains foreign reserves and drives the cost of fuel to the heavens.

In the interim, the federal government should see what it can do to reduce the price of fuel, as the suffering is draining and killing Nigerians alarmingly.

Even if it means introducing an interim subsidy until the refineries start working or Dangote refineries start functioning properly and selling their fuel at a very affordable and moderate rate. After all, Nigerians should enjoy the natural resources God has bestowed on them.

This may not be too much to ask as virtually all the countries in the world have one form of subsidy or the other put in place to make life bearable for their citizens, pertaining to food, housing, education, etc.

Unfortunately, if the government fails to heed wise counsels, protests against the high cost of fuel and attendant suffering in the land will go unabated.

With the risk of sounding alarmist and being dubbed a doomsday proponent, some of the protests and unrest may eventually lead to a breakdown of law and order, which we must guide against.

• Uche-Ejeke is a public affairs analyst