Petrol Subsidy Removal: A tool politicians use to scam average Nigerians

On May 29th, 2023 at the inaugural ceremony of Asiwaju Bola Ahmed Tinubu (BAT) as the president of the Federal Republic of Nigeria, Nigerians listened with hope and optimism for the changes the new administration was going to introduce that would make an instant impact on the life of the citizens. Nigerians had suffered untold hardship under the government of former president Mohammadu Buhari and the day promised to bring new hope. Amidst other promises for action was the immediate removal of the petrol subsidy. Political analysts had predicted that this would happen following the disposition of BAT towards the issue recently and especially when all the presidential candidates noted the removal as part of their manifesto.

The petrol subsidy announcement made an instant impact albeit negative on the lives of Nigerians.  The effect has been excruciating and the impact drastic. Since then many have been stuck in the locations where they found themselves at the time of the announcement and unable to return to their base. The price of petrol has increased by over 300 percent and has affected all aspects of the economy such as transportation, food, healthcare, etc. The citizens that just recovered from the pains of naira scarcity have had to face another self-inflicted problem of the high cost of living.

As the citizens groan, government officials are trading blames over who indeed removed the subsidy. Is it PMB or BAT? They argue that there was no provision for subsidy beyond May in the budget so PMB should be held responsible. Recall the $800 million loan from the World Bank to serve as a palliative for the impact of subsidy removal. The argument as to who removed it is baseless and shows signs of abdication on the part of the new administration. The new administration should be responsible and courageous to face the backlash of the policy. Someone should take responsibility and the only one we know in the driver’s seat today is BAT.

Everyone seems to be aligned that the time is ripe for subsidy removal judging from the narrative that it favours only the elite. The mention of the elite seems to resonate well with the masses who have continued to live in abject poverty. And the politicians have latched on to this narrative. Recall, however, that the struggle against subsidy removal in 2012, which was fierce and collective, relied on the timing and level of preparedness as their justification.  The promoters (the majority are in this new government) argued that before the petrol subsidy can be removed, the government needs to tackle corruption and build basic infrastructure that will ameliorate the impact of its removal. For example, now that the price of petrol has gone up and it will take about N20,000 to N30,000 to fill the tank of an average car, or where transportation cost has moved from N200 to N600 per drop making it about N20,000 in a month to move from home to work in a country where the minimum wage is N30,000, there should have been an alternative transportation system to support the citizens. In Nigeria where power availability is near zero and individuals, households and companies have to depend on self-powered generation through the use of petrol or diesel generators, the impact will be damming and capable of making businesses close shops, including reducing the quality of life of households.

Those who initially opposed subsidy removal had recommended investment in mass transit, rail, alternative/renewable energy, and holding corrupt officials culpable. Since the last agitation not much has changed and no sight of alternative to cause succour. A few months ago, Nigerians woke up to the revelation that a certain group had piped our crude directly from the crude oil pipeline on land straight into the sea for evacuation. This was a brazen attempt at stealing the nation’s commonwealth as against the retail bunkering we were used to. Nothing was heard after that revelation as to who was behind it and what has happened to them or what steps the government has taken to forestall its reoccurrence. One of the selling points of Buhari’s and hence his party, APC’s campaign was that subsidy was a scam and that it did not exist. It was at the time a narrative that resonated well and everyone fell for it. Eight years down the line, we are faced with the same monster. The interesting part is that the new administration has now come to promise its removal. Removal of what was never there? Something is not adding up.

The idea of subsidy is that the federal government underwrites the bill of the citizens to prevent them from paying too much for the product. This is good because it allows the citizens to pay N192 instead of N511. The government says they are spending too much and that they could use the money to do other things for the citizens. They also claim that many markets buy the product at a subsidised rate and thereafter go through the border to sell at an exorbitant price. Why can’t we prohibit this movement across the border to neighbouring countries or put an extra tax on products leaving the country at the border? The government has also complained of over-invoicing for products imported into the country, where approved importers claim payment for what was not supplied. Why can’t we fix our refineries so we don’t have to import anymore or even bring to book the culprits? Many had waited with optimism that PMB would fix our refineries and make them work rather than make the whole country wait for the one being developed by a private investor. If PMB with all the support Nigerians gave him, based on the perception that his administration would tackle corruption, spent eight years without fixing the refinery, who else will?

Until the government consciously put in place the long-mentioned alternatives of mass transit, alternative energy, revamping or building new refineries, the issue of subsidy removal will continue to be a scam and unfortunately, it looks like it is going to be rendezvous with this new administration.  BAT can afford to treat the citizens with ignominy and ignore their cries, after all only eight million plus citizens voted him to power in a country of two hundred million plus citizens. He can afford to toy with the lives of the citizens.  One expected BAT to know better than to transfer the cost arising from the subsidy removal to the citizens for the government and its officials to have more money at their disposal. Forget the rhetoric of health, education, and other sectors receiving the surplus. This is unlikely to happen as promised. PMB has left us after eight years worse than we were. BAT should have known better but unfortunately, we are in for another rough ride.