Tuesday, July 7, 2020
Sharp-Journal > Discourse > Fuel Subsidy Removal: Bane or Boon to The Economy?

Fuel Subsidy Removal: Bane or Boon to The Economy?

Fuel Subsidy Removal, Dr. Kachikwu

One would have thought the root cause behind the 2012 #OccupyNigeria movement during Goodluck Jonathan’s regime would forever hide its ugly head. But I guess we all saw this breaking news coming —fuel subsidy removal, downstream deregulation and fuel price increment.

The announcement by the Minister of State for Petroleum, Dr. Ibe Kachikwu, caught all Nigerians unaware (perhaps, not everyone) on Wednesday, 11th May, 2016, and has set tongues wagging, the virtual sphere awash with vents of anger amid mixed reactions, and the labour union vowing to go against the policy.

Long queues at filling stations and the resurgence of ‘black marketers’ selling fuel at ridiculous prices were the trends three months ago till we suddenly could inhale a breath of fresh air with availability of Premium Motor Spirit (PMS). Now, we are at it again and ‘may unlikely’ find lasting relief, even as the Minister of State for Petroleum has promised that prices will go down in six months.

Dr. Kachikwu was reported to have said Nigerians will be amazed at what will become of the price of Premium Motor Spirit in the next six months, saying the decision was necessary to put an end to fuel scarcity in the country.

The question now is whether Nigerians should come to terms with Kachikwu’s statement that “by opening up the space for people to perform, to practise their trade, we would be amazed at what will happen to the recent price of N145 per litre of petrol, because it will go downwards in six months?”

It is understandable that the inability of importers of petroleum products to source foreign exchange at the official rate due to the massive decline of foreign exchange earnings of the federal government constitutes the cause of fuel scarcity in Nigeria. Certainly, you don’t give what you don’t have, but in matters as sensitive as this, the present economic imbalance affects the masses even more than the Federal Government could imagine.

Thus, the need to provide a palliative should have been considered before enforcing the fuel subsidy removal policy at the cost of punishing the common man whom aside from lacking several basic amenities as good water, steady electricity supply, food, etc, would now be bothered with thoughts of getting enough fuel to run his “I better pass my neighbour generator.”

Only time will tell if this policy is indeed a bane or a boon to the nation’s economy. Nigerians crave for true dividends of democracy and a beneficial socio-economic milieu to better their lot. They call for a holistic deregulation of the petroleum sector and not a mere price increment in the name of subsidy removal — to foster the availability of petrol, but not affordable to all.

According to Dr. Kachikwu, the recently passed 2016 budget will serve as a short term palliative measure to cushion the effect of the fuel subsidy removal. If this assurance is anything to go by, it behooves on Nigerians to keep watch on the budget implementation and expect what successive days hold with regards to this declaration and the change mantra of the APC-ruling party.

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