Home column - Friday Fuel subsidy removal: Beyond palliatives and alleviations, By Isaac N. Obasi

Fuel subsidy removal: Beyond palliatives and alleviations, By Isaac N. Obasi


It appears that the Federal Government of Nigeria is playing with fire with the sudden and ill-advisedly-timed removal of the fuel subsidy. The fact that there was a near consensus that subsidy should go, does not mean that it should be removed anyhow demonstrating lack of a comprehensive understanding of a huge problem and more so with an insensitive price differential between the old price and the new one. The new amount being sold now is an economic joke taken too far. The amount N500 (plus-minus) depending where one is located, is by far beyond what majority of Nigerians can cope with. This is simply because if you increase the salary of workers by one hundred percent (i.e times two now), it will only keep the workers at their current level of suffering, no more no less. In fact it means that nothing has changed practically in their economic well-being. 

This equally means that not much can be achieved by salary increase given the unwillingness of the Federal Government to pay a decent wage to its workers going by the definition by the International Labour Organisation (ILO). In actual fact, two people I had discussions with, before writing this piece, expressly said that the cost of fueling their cars in a month is higher that their salaries. The implication is that not much is expected to be achieved with the on-going so-called ‘robust’ (apologies to Dele Alake Federal Government spokesman) discussions between the government and labour unions. There is a limit therefore that organised labour can push the government along the salary-increase trajectory in any meaningful engagement with it.

The thesis of this piece is that palliatives and alleviations (whatever names they are called) which the government sees as a panacea to the increased workers’ economic problems, can only scratch the surface. Put differently, workers’ economic problems are far beyond what palliatives and alleviations can resolve. What then are the options for addressing the many problems arising from the sky-level hike in fuel price? 

It is very clear that beyond the noise and propaganda associated with the electioneering campaign, the over-highly rated Tinubu men and women, did not have any serious plan on how to resolve the anticipated problems arising from the removal of the fuel subsidy. This is very clear from the countless missteps of the Tinubu administration on this very sensitive matter. From the way this baby government handled this very controversial issue so far, it shows that the Tinubu super men and women noisily dominating the media, and who are touted to have the magic to solve our economic problems, do not even  properly understand where the real problem with the fuel subsidy lies. Do they know in the first place why our refineries are not working? If they know, why would they hurry and jump into the issue of fuel subsidy removal during the month of May?

Why would the Tinubu supermen not openly ask the question why our refineries are not working in spite of the humongous amount the Buhari administration actually budgeted for their turnaround maintenance even while their proposed completion dates made public. No one has explained to Nigerians why these refineries are not working including the implementing agencies.

A related question is: why should fuel subsidy be removed without addressing the problem of corruption associated with the non-working of the refineries and the continued importation of fuel under the very scarce foreign exchange regime? Everyone knows that it is corruption that ties round everything associated with fuel importation and the subsidy saga. Fuel subsidy many have said, is a scam. The presidential candidate of the Labour Party Mr. Peter Obi made this very clear during his impressive election campaign.

Then one wonders why another man whose ambition for a long time is to be the president of Nigeria not have a ready-made and workable solutions to our fuel subsidy palaver given the long history of corruption associated with it? I doubt if Nigerians can afford to have a Buhari-like type of administration.  

It is on record that organised labour had for a long time demanded that fuel subsidy should not be removed until our refineries are working. If the Tinubu administration is to be taken seriously, two things must happen. First, the major refineries and the modular ones must be working before removing the fuel subsidy. And secondly, corruption must be exposed and stopped so that Nigerians can breathe a sigh of relief from this Nigerian government-induced economic cancer which has gradually been killing the masses since the 1980s when the Structural Adjustment Programme (SAP) was introduced by the Babangida military regime. 

Fuel subsidy issue is fire itself, and so a baby government should not play with this fire because it can be a consuming one. The Buhari administration cunningly avoided it in the name of running away from social unrest instead of planning how to effectively deal with it which would have made things easy for the take-off of a succeeding administration. The Tinubu administration should therefore use its honeymoon period to plan very well on how to effectively deal with the explosive issue to avoid massive unrest and escalation of social problems.

This baby government should remember that a lot of Nigerians are unemployed and currently frustrated with hopelessness written over their faces. The baby government should remember also that those who are even working are equally frustrated and cannot meet up with their daily demands. The government should therefore avoid pushing Nigerians to the wall. In fact, it should not allow itself to suffer from its predecessor’s lackluster and very poor handling of this explosive issue. It should be properly advised to stop playing with fire. It should find a way to soft-pedal on this very unreasonable, unbearable and unexpected price increase. Implementing agencies should not be allowed to mislead he baby government.

Prof. Obasi can be reached at [email protected]   

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