By Suleiman Yakubu

At his inauguration May 29, Nigeria's new President, Bola Ahmed Tinubu finally put to rest the much debated subsidy removal issue when he said loud and clear that his government will no longer provide funds to subsidize petrol. He reiterated that: "Subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions." And with those words he ended the subsidy regime in Nigeria.
However, some people have questioned Tinubu's decision to bring up the matter on the day of his inauguration as sudden and untactical. For instance, the Trade Union Congress of Nigeria (TUC) on Tuesday cautioned President Bola Tinubu on the removal of petrol subsidies in the country.
The statement signed by its President, Festus Osifo, and Secretary-General, Nuhu Toro, noted that President Tinubu's statement on the removal of fuel subsidy, led to an "increase in pump price and the exploitation of the people by unregulated and exploitative deregulated prices…".
Still, there are many others who think that the President did the right thing. They include the Nigeria Extractive Industries Transparency Initiative (NEITI). It lauded the political will of President Bola Tinubu to remove fuel subsidy.
The agency said that it has persistently recommended for the removal of subsidy since 2006 given its concerns about the huge financial burden that the subsidy imposed on economic growth over the years. Specifically, the NEITI report shows that, between 2005 and 2021, the country spent $74.39 billion (N13.69 trillion) on subsidy.
In a similar development, even the House of Representatives gave the president a thump's up for removing subsidy; following the adoption of an urgent motion of public importance by Rep Abdulraheem Olajide (APC-Lagos) at the plenary Tuesday.
While presenting the motion, Mr Olajide noted that: “The president is concerned about the masses and has a meaningful objective to utilize Nigeria funds appropriately with budgetary reforms agenda on education, health, and infrastructure. “ Others include agriculture, food, security and above all security of lives and property as embedded in the constitution". With petrol subsidy consuming as much as a third of our national budget in 2022, it is glaring to most Nigerians that the government cannot continue providing direct financial support to oil companies just to subsidize the product for them.
However, what is truly irksome is the fact that right now nobody is talking of the burden on the masses. Former president Buhari at least spoke of cushioning the effect of subsidy in his last days in office. The Buhari administration took practical steps towards ending subsidy payments. This includes funding from the World Bank, which has pledged $800m towards providing palliatives to help the most vulnerable citizens to absorb the expected price shocks.
It is quite alarming that as soon as the president spoke about subsidy removal at his inauguration, the very next day, most filling stations that sold fuel the previous day, suddenly closed shop. And two days later, the pump price increased to between N530 and N600, and even the NNPC now sells the product at that range, which makes it official that the end of the subsidy regime has come.
According to a recent report by the Nigerian Tribune, "with a projected average cost of N700/litre once subsidy is removed, it implies that Nigerians would pay about N46.2billion daily for petrol, which translates to approximately N1.4 trillion monthly and N8.4 trillion in six months (July to December 2023)".
Needless to say, such an increase in the pump price of petrol, would ultimately lead to an increase in the general level of poverty. This is due to the consequent rise in transport costs leading to rise in the prices of commodities, especially essential ones. One would therefore expect that President Bola Tinubu would wait to implement palliative measures before removing the subsidy on petroleum.
Also, we all know that the audacity to stop subsidy payments comes mainly from the fact that the new 650,000 barrels-per-day Dangote Refinery and Petrochemicals will start full operations later this year. The refinery is expected to boost domestic refining capacity, and help Nigeria meet 100% of its refined petroleum product needs, getting rid of the current consumption shortfall. Hence it will reduce import dependency and stimulate economic growth. Therefore, one had expected that the president would have waited, at least, until Dangote Refinery started operation before getting rid of the subsidy.
Still, although it is definitely not going to be easy, now that subsidy is here, the best is to support the president to deal with it once and for all. Fuel subsidy may lead to a reasonable level of inflation, but it is also expected that substantial savings will be realized when the government stops paying to subsidize petroleum products. It is this great savings that is expected to be channeled to education, health, roads and other critical infrastructures.
Nigerians have been shortchanged for a very long time by the reason of subsidy. Subsidy removal has become the conduit through which astronomical amounts of money has been siphoned for many decades now. Things have gone so bad that sometimes the same petrol on which subsidy has been paid, is smuggled out to other African countries and sold at a higher price.
Surely, Nigerians have been shortchanged through subsidy payments. But a worse type of shortchanging that can happen to us is if after making such huge sacrifices, that must accompany subsidy removal, the savings accrued were siphoned by corrupt officials and not channeled towards funding education, health, roads and other critical infrastructures as promised. That'll be "double wahala", apologies to Fela, the late Afrobeat legend.
It is therefore our prayer that the same forcefulness by which President Tinubu used in putting an end to subsidy payments, would be employed towards ensuring that the savings accrued were channeled towards those critical sectors that would lift the economy out of its present quagmire. This is because anything short of that would amount to nailing the coffin of our collective destiny.