EditorialEDITORIAL: Politics of Fuel Subsidy Removal

EDITORIAL: Politics of Fuel Subsidy Removal

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The confusion trailing the planned removal of fuel subsidy in Nigeria is not only shocking but also unnecessary. This is coming as most Nigerians believe that the fuel subsidy regime, which is costing the country a whopping N3.36 trillion ($7.3 billion) in the first six months of 2023, is not only sustainable but also a waste of public funds. To many concerned Nigerians, what the Federal Government has been referring to as fuel subsidy is simply a big fraud with the channeling of the so-called subsidy payments to some smart businessmen.

Nigerians, who had been looking forward to the challenges ahead of the subsidy removal, were therefore jolted when the news broke on Thursday that the planned removal had been suspended.

Minister of Finance, Budget and National Planning, Zaniab Ahmed, had broken the news , saying the National Executive Council (NEC) meeting which was held on Wednesday, had approved the suspension. The minister had explained that the removal of the subsidy would likely take effect in June because the Petroleum Industry Act, PIA and the 2023 budget provided subsidy till June, stressing that any delay may require the amendment of the PIA and the budget provision.

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However, coming a day after the announcement by the minister and just about the time the Nigeria Labour Congress (NLC) was jubilating over the reported suspension, the Federal Government came out in its true elements by dismissing the earlier report as it affirmed that the scheduled subsidy removal has not been suspended.

A statement issued on Friday by the Special Adviser, Media & Communications, to the minister, Dr Yunusa Tanko Abdullahi, countered Thursday’s disclosure by his boss as he insisted that the Federal Government has not suspended the fuel subsidy removal.

“Against the backdrop of the story in some media that the Federal Government has suspended the removal of petrol subsidy, the government has said that it has not suspended the removal but has rather expanded the subsidy removal committee to include teams from the incoming administration and the state governors.

“The Honourable Minister of Finance, Budget and National Planning, Mrs. Zaniab Ahmed, said that NEC deliberated on the issue extensively and came to the conclusion that the subsidy must be removed as it is not sustainable, but there is a need for further consultations, especially the need to involve members of the incoming administration and representatives of the State governments. We agreed to form an expanded committee that will be looking at the process for the removal of the subsidy, including determining the exact time as well as the measures that need to be taken to provide support to the poor and the vulnerable,” Abdullahi said in the statement, which he signed on behalf of the minister.

He added, “There is also the need to agree to alternative measures that will be put in place to ensure that there is sufficient supply of petroleum products in the country. The Subsidy Removal Committee currently comprises the Ministry of Finance, Budget and National Planning, Ministry of Petroleum Resources, Nigerian National Petroleum Company (NNPC) Limited, the downstream and upstream regulators, Central Bank of Nigeria (CBN) and the Chief Economic Adviser to the President.

“The 2023 Fiscal Framework and Appropriation Act as well as the Petroleum Industry Act (PIA) have made the provision that the government should exit fuel subsidies by June 2023. The committee is to work out a road map for the removal of the subsidy. No change in the overall policy direction regarding the petrol subsidy is envisaged by June 2023.”

Nigerians are not surprised at all by this face-saving denial of what the Federal Government actually has in plan, more so, as it is coming from a government that has not demonstrated enough political will to end the fraudulent subsidy regime throughout its eight-year tenure that is ending on May 29.

We therefore wonder what benefit the purported suspension will bring to the same government that has failed woefully to deliver on its promises to Nigerians. We are also worried that the same finance minister, who had been in the forefront of the whopping $800 million loan from the World Bank to cushion what she described as the effects of the subsidy withdrawal on 10 million vulnerable Nigerians, would even imagine the suspension of the plan.

We therefore call on the President-elect, Bola Ahmed Tinubu, to display the uncommon courage he is known for and call the bluff of those still interested in continuing the fuel subsidy fraud by sticking to the removal plan as scheduled. While we are glad that Tinubu has also expressed his support for ending the subsidy regime, we want to encourage him to stick to the plan by not allowing anybody to scuttle the plan.

Nigerians, no doubt, will feel the impact of the withdrawal on their day-to-day activities, but the benefits of stopping the fraud far outweighs the immediate pains it would cause. No attempt should therefore be made to continue the fraudulent regime under any guise as we say NO to the kite being flown currently by the Federal Government.

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