Key highlights
- The NLC has said that fuel subsidy removal will set Nigeria on fire
- However, an oil and gas analyst says that poverty increased even when the government was paying fuel subsidies and the removal will ensure the advancement of other sectors of the economy.
- Other Nigerians have said that a clean-up of the fuel subsidy regime and an attempt to fix bad governance are better alternatives than the outright removal of the fuel subsidy.
Fuel subsidy has grown from a problem into full-blown cancer that needs to be cut off completely. This is the position of Oil and gas analyst, Dan D. Kunle who recently spoke to Nairametrics. He made the statement as a reaction to the April 3 declaration by the Nigeria Labour Congress that the fuel subsidy removal will set Nigeria on fire.
According to Kunle, fuel subsidy removal is important because the country is losing funds on a daily basis to subsidize a product while other sectors of the economy are in need of funding. He said:
“We have been massaging this problem and it has become a monster now. We need to encourage the incoming government to dismantle this monster and cut cancer. The government has been paying fuel subsidies all these years, yet, the poverty rate in the country is on the increase.”
According to Kunle, Nigeria should remove the fuel subsidy so the funds can be transferred to other sectors of the economy as the country cannot continue to do the same thing and expect a different outcome. Recall that in 2022, the National Bureau of Statistics (NBS) revealed that 133 million Nigerians were living in multidimensional levels of poverty.
Contrasting views
On the other hand, Oil and gas analyst, Kayode Oluwadare had previously told Nairametrics that the fuel subsidy removal will amount to increased levels of poverty unless the government had a structure of social welfare programs targeted at the low-income earners in the country. These programs will help Nigerians cope better with the fuel subsidy removal.
Meanwhile, some Nigerians have expressed skepticism over the N400 billion that the Nigerian National Petroleum Company (NNPC ) Limited has said it is spending on fuel subsidy payments on a monthly basis. To them, an alternative to the removal of fuel subsidies would be to fix governance failures across all tiers of government and get rid of the corruption within the subsidy regime. Rather than transfer the cost to an already overburdened populace who are battling too many inefficiencies ranging from insecurity to inflation.
Backstory
On April 3, Emma Ugboaja, the General Secretary of the Nigeria Labour Congress (NLC) told the media that the government plans to set Nigeria on fire if they go ahead with the removal of fuel subsidies. He was quoted thus:
“There is no subsidy for anybody to be removed. The point that has to be made is that we must refine it. Anything outside making our refineries work is wickedness.
“Anybody moving Nigerians in the direction of subsidy removal wants to blow up the country. They can go ahead and blow up the country. But the truth is anything less than refining crude in Nigeria; you cannot push us into that argument.
“We have been down this route before, and it has never paid off. We keep calling it a fraud and that fraud was confirmed in 2016 when they looked us in the face and told us that they have removed the subsidy.
“Any increase in petrol price from the government in the name of subsidy removal, we will challenge it. We will work against it, it is straightforward.”
What you should know
The Federal Government has received $800 million from the World Bank to offer cash transfers to 50 million Nigerians as palliatives for the fuel subsidy removal.
