INTRODUCTION
Subsidy
A sum of money granted by the state or a public body to help an industry or business keep the price of a commodity or service low.
"a farm subsidy"
Source
Fuel Subsidy In Nigeria, Its Removal And Implications.
Fuel Subsidy in Nigeria is the money the government pays the oil marketers who import refined petrol Motor spirit (PMS) to keep the price low. This practice dates back to 1970's. Just before the removal, Nigeria have been spending over #400 billion on subsidy monthly. (500 Million Dollars)
However, most government had tried to stop the fuel Subsidy Because the amount used to subsidiz fuel is so large that it can be used to solve other national problems.
The most recent President that tried removing this subsidy was Good luck Jonathan. His financial minister (Ngozi Okonjo Iweala) was the first person to expose the fraud in the subsidy scheme. They tried to remove this subsidy in 2012, but Law Makers in the House Of Representatives resisted that attempt. There was also a massive protest accross the country which forced the government to abandon it. Then the price was to jump from #65 to #200.
Fortunately, as the country approached the 2023 general election, the three prominent presidential candidates affirmed their resolve to remove Fuel Subsidy if they become President. One of them; (Peter Obi) exposed all the crime in the subsidy scheme, according to him, "Subsidy is an organized crime and should be scrapped after relief measures and policies have been put in place"
Consiquent upon, the incumbent government capitalized on the fact that it have been established that the subsidy scheme is fraud and they tactically removed it. (In the 2023 budget, the Government only made provisions for subsidy till ending of June).
After the general elections, a winner emerged, (President Asiwaju, Bola Tinubu) during his innogral speech, the new President announced that subsidy have been removed. This cause lots of panic which pushed-up the price from #184 to about #600.
Some petrol stations started hording the product making it both expensive and unavailable. Cost of transportation doubled. Many people parked their cars. There were few vehicles on the road the first week. People walked on foot to their offices as seen in the picture below.
Currently, Nigerians are Suffering so much because inflammation hit 22.79% in June, this is the highest since 2015.
What The Government Should Have Done Before Removing Subsidy.
The government should have placed certin measures in order before removing subsidy. This is to help amilorate its effects on the Citizenry.
The things I think they should have done are as follows;
- Fix our refineries.
- Increase the minimum wage. Which is currently at #30,000 ($37.83)
- Enshre that rail line cuts accross all parts of the country.
- Guarantee steady power supply.
- Encourage indeginous automobile companies to produce vehicles that will use Sola or electric.
- Create jobs for people. (Which is currently at 41%)
- Provide government busses to convey people at a subsidized rate. (At least, in big cities)
If at least five of these were met, the effects of the subsidy removal wouldn't be this bad.
Conclusion
Because inflation have hit all time high, resulting in indemic suffering in the country as a result of the removal of the fuel Subsidy, the Nigerian Labour Congress (NLC) have given the Federal Government seven days ultimatum to reverse the fuel Subsidy Removal or face an indefinite strike Nationwide starting from 2nd of August 2023.
We hope the President and His team will look inwards and bring workable policies and procedures to cussion the effects of this subsidy removal on her People.
Where: # = Naira (Nigerian currency)
Fuel = Petrol Motor Spirit)
NLC = Nigerian Labour Congress. (It is a trade union that defends the workers from the Government)