The Fuel Subsidy Policy; The Benefits And Detriment Of It Removal and Re-introduction -By Prince Samuel Adesegun Egunjobi

One of the most popular economic policies in Nigeria is the removal of fuel subsidy, an action that affected the operation of energy industry and the foundation of the Nigeria petroleum sector.

Although, the bold removal was applauded by the elites but an average Nigerian was confused and the after effect of the removal led to hike in fuel price and other crude oil by-products across the country.

In the past, the administration of former president Goodluck Jonathan proposed the removal of fuel subsidy but was resisted through protests, media actions and other means of expressing grievances with the direction and intention of his government.

The protest was led by the newly formed members of APC, members of civil society organizations, non-governmental organizations, concerned citizens and the policy was reversed due to the public outcry and fear of civil unrest the implementation of the policy may caused in the country.

In 2023, during the inaugural speech of President Bola Tinubu, he announced the removal of fuel subsidy and the rest is history. The government claimed that saboteurs of Nigeria economy and other members of shadow government/cabals were exploiting the fuel subsidy at the detriment of the masses.

” The large budget for subsidizing fuel import can be channel to other sectors and areas that will have direct impact and positive effect on the economy/people “. This was the position of some of the elites and it was implemented by the government.

Although some of the moribund and unproductive local refineries are now operating, which the government is claiming that the bold reform and removal of the fuel subsidy was responsible for.

Many Nigerians are surprised with the increment in fuel price despite the large deposit of crude oil in our country despite the operation of local refineries, and won’t subscribe to the fluctuations of oil price in international market due to the closure of Straits of Hormuz, an action caused by the conflicts between USA & IRAN.

Alh. Atiku Abubakar, a former Vice President in Nigeria and Presidential flag bearer of the ADC have brought the issue of fuel subsidy to the forefront of the campaign for the apex office and management of the economy. He claimed that the policy of the APC led government have impoverished Nigerians and the removal of fuel subsidy is no beneficial to an average household but only filling the pockets of friends of the President, enriching oil marketers and greasing the palm of political associates.

He proposed to re-introduce the fuel subsidy to save Nigeria from the hardship the policy have brought since the removal, and there is no reason to rob Peter (the people) to pay Paul (State governors/Lawmakers).

The robust revenue the current administration have generated across sectors into the treasury account have been linked to the policy, which also led to increment in state allocation to fund projects, service and governance across the 36 states of the federation with the Federal Capital Territory FCT) inclusive.

Economists and International Monitoring Organizations have applauded the national growth the reform of President Bola Tinubu have achieved since coming to power, and placing Nigeria on the path of sustainable development through strengthening of local industries, massive nationwide infrastructural projects, rehabilitation of abandoned projects, bringing government closer to the people through the local government autonomy and increasing budgets for Constitutuency development for lawmakers.

Critics and others have claimed that if truly the reform is working for the good of Nigerians, why is there a widespread inflation, hardship and unemployment? But many households also commending the president on Youth development initiatives and schemes e. g Students Loan, the establishment of the Nigeria credit corporation to support business access to credit facilities, and other programmes introduced to empower Nigerians, but the poor we will always have among us.

Prince Samuel Adesegun Egunjobi, MBA