The news of the fuel subsidy removal on the 1st of January 2012, which brought the price of petrol to a whooping N141 came as a rude shock to most Nigerians, obviously that was not the kind of new year gift any Nigerian would have expected and thus it has continued to generate reactions judging from the nation wide strike which the organized labour and other civil society groups embarked on, grounding economic activities in the country. The common people have clearly and continuously said “no” to this issue of fuel subsidy removal, no doubt the interest of the people have been compromised as their collective interest have been drowned by the interest of a few key players in this economic chess game which may continue to be umpired by miscreants.
The skirmishes which ensued have left an indelible mark on the minds of Nigerians, especially the picture of protests, burning of properties and more so some innocent people have lost their lives. It is the opinion of most common people that this is a fundamentally flawed decision by the government which have had phenomenal consequences, however, though this scenario has been assuaged by the unexpected announcement by Mr. president himself of the reduction of the price of PMS to N98 per liter, obviously, this is not the end of the story even as the house of assembly and the EFCC continue to probe into the federal government petroleum products subsidy programme. There is reason to believe that the government is preparing to remove the fuel subsidy eventually, judging from the government’s standpoint as summarily captured below.
The Social imbalance the fuel subsidy will create, in the opinion of the government, majority of people in Nigeria are poor and do not have need for fuel subsidy inview of the fact that they cannot afford to have cars. This is a very sensitive area as there are two sides to this position. The CBN governor Sanusi Lamido Sanusi has claimed that 16billion was expended or lost to subsidy and argued that if subsidy is not removed it will eventually wipe out the entire foreign reserve of the nation in certain eventualities. The coordinating minister Dr Ngozi okonjo iweala said government had resolved to deregulate the downstream sector of the oil and gas industry to help the low income class of the society as against the middle and high class.
It is quite disheartening however that in spite of all the intellectual rigmarole Nigeria still imports petroleum products from other countries and continues to report clamp down by authorities of illegal refineries when we cannot boast of good refineries after 51 years post independence, the petroleum resource minister Mrs. Diezani Alison Madueke made bold to say that the original contractors who built the refineries had been brought back to carry out (turn around maintenance) a development that has resulted in a 50-60 percent increase in the capacity utilization of the four state owned refineries. She said hopefully in the next 18months, the situation would be better.
However, we can say that government has yet to properly dissuade the reaction of a good number of persons. The government have also ignored the issue affecting groups and civil organization as it relates to their specific benefits and the time frame within which such people should begin to realize and enjoy the dividends of this policy, In the medical field pharmaceutical companies warned that if symptoms continue after 3 days please consult your doctor, who shall we consult when government policy fails.
A consultant raised the following issues against fuel subsidy removal stating that government have yet to bring to book those accused of malpractices in the industry.The consultant adds that the removal of subsidy and deregulation proposed by government will lead to massive inflation in the prices of essential commodities like education, water, food, transportation, hospitals etc. which will not be favorable to the common man as eloquently put by the honorable ministers.
The consultant suggests that instead of removing fuel subsidy it is better to increase tax. He added that this is a measure to breach the gap between the rich and the poor and to also discourage purchase of certain luxury products like expensive cars and houses. That the government has tactfully ignored this fiscal tool is quite suspect. Currently certain taxes like withholding tax, pay as you earn are in place, increasing this tax to generate more revenue to government is advisable. Consequently the rich will have to pay more.
This may however shift the burden back to the poor masses as the price of certain commodities controlled by this class of people will go up, but he quickly added that this would be a much better approach to fuel subsidy removal or discontinuation.
This is where you have to take an initiative, the government cannot do everything for its people, and this is the time to reflect on the words of J.F Kennedy who said “do not think of what your country can do for you but think of what you can do for your country”. Considering the Nigerian factor it is common knowledge that the government cannot address quite a good number of issues, especially as price in Nigeria is known to be upward inelastic, which means that once price goes up it does not come down. This is evident in the price of almost every commodity in the market today, from cloths, food, shelter etc. Hence, every Nigerian must brace-up to the impending challenges that the eventual removal of the petroleum subsidy portends by strategizing and coming together to make ends meet.
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