Key success factors of fuel subsidy removal

Key success factors of fuel subsidy removal

Sir: Medium Term Expenditure Framework (MTEF) of the immediate past administration of President Buhari is N3.3 trillion proposed to be committed on petroleum subsidy between January and June.

 Meanwhile, it’s already in the public domain that the immediate past regime expended a whopping N11 trillion on subsidy from 2015 to May 2023 when it exited.  Instructively, subsidy regime has been originally scheduled to come to a close by the end of June.

Sometime in April, Nigerians vividly recall that the ex-President, Muhammadu Buhari was indeed poised to declare that from the beginning of the first quarter of 2023, curtains would be drawn on subsidy era before he changed his mind, and announced that he would prefer the new government to take charge of the crucial decision.

 Remarkably, it’s that historic decision that President Bola Tinubu has taken that has attracted condemnations from few Nigerians who have over the years been holding the nation by the jugular. It’s therefore safe and germane to conclude that, these people are the architects of the uproar and propaganda reverberating across the country following the president’s declaration.

It’s curious that successive Nigerian government revel in fuel importation at cut-throat prices despite the fact that we have four refineries that could conveniently and profitably refine our crude oil for domestic consumption, as well as for exports, if they’re allowed to function.

 While submitting that drawing the curtains on the regime of subsidy is extremely difficult, President Tinubu has no other choice than to implement the removal since it’s already provided for in the Petroleum Industry Act (PIA).  

The PIA provisions has given petroleum industry a new order with the improved fiscal framework, transparent governance, enhanced regulation and the creation of a commercial and independent National Oil Company that would operate independently and enjoy unfettered freedom from institutional regulations like Treasury Single Account (TSA) and other regulations that constitute bottlenecks in its operational activities.

Thankfully, Buhari implemented the creation of NNPC Limited before he vacated. The president is therefore advised to take the implementation to the new level, especially by swiftly rehabilitating the nation’s refineries, as well as the pipelines across the nation, some of which have been significantly vandalized.

 Finally, it won’t be out of place for the government to roll out palliatives to cushion the effect of temporary pains and agony that the astronomical increase in prices of petroleum products would be inflicting on the citizenry and corporate organizations.

Such palliatives could be in form ensuring that agricultural products flood the markets in all the nooks and crannies of the country and at affordable prices. May be the government need to immediately acquire fleet of trucks from China, Brazil, Japan or wherever for the purpose of moving the produce from wherever they’re being harvested to markets for the citizenry.

 Government could also move immediately to increase the workers wage at all levels of government, while also mandating the Central Bank of Nigeria to stem tide of inflation that would normally associate with such policy initiatives.

 The government could reach out to downtrodden members of society, through cash transfers to provide them succour.

 On a related note, the federal government should also move to radically and immediately ensure that power is made available to households and corporate organizations and at reasonable price. These initiatives, if implemented would significantly lessen the pains and tribulations being inflicted by the transition.

I appeal to Nigerians to cooperate, collaborate and support the new government in its drive to refocus, reset and reposition the oil and gas sector, and other related activities that would ensure prosperity, as well as launch Nigeria into the comity of great nations.