THE NEVER-ENDING FUEL SUBSIDY PALAVER

Government has merely postponed the evil days

After approbating and reprobating for several years on the issue, the federal government last week finally announced an 18-month deferment in the removal of fuel subsidy, effectively transferring the implementation to the next administration. By pushing the burden till after the 2023 general election, President Muhammadu Buhari has sent a clear message to every discerning mind that bad politics rather than anything else torpedoed the move to bring a closure to the vexed issue. Bereft of ideas on how to provide the necessary ingredients to make subsidy removal acceptable to most Nigerians, the federal government has merely postponed the evil day.

Unfortunately, it was expected. Few days to the sudden deferment of the subsidy removal timetable, there were discordant tunes among top government officials. First was the Senate President Ahmed Lawan who, after a visit to the president, said that the latter did not send anyone to remove subsidy. It apparently escaped Lawan’s attention that the Petroleum Industry Bill he and his colleagues passed and assented to by the president was predicated on the removal of fuel subsidy. Passed in August 2021 by the Lawan-led National Assembly, the PIA stipulates that the prices of all petroleum products, including PMS, should be deregulated within six months of the enactment of the law.

It is perplexing that the same senate president who presided over the passage of the PIA as well as the 2022 budget with provisions for subsidy only up to June this year was talking about Buhari not authorising anybody to remove fuel subsidy. Minister of Finance, Budget and National Planning, Zainab Ahmed, who argued last November that subsidies on PMS were no longer sustainable has also changed her tune in the face of opposition from organised labour. “In our 2022 budget, we only factored in subsidies for the first half of the year; the second half of the year, we are looking at complete deregulation of the sector, saving foreign exchange and potentially earning more from the oil and gas industry,” she said before the latest development.

THISDAY holds a strong position on fuel subsidy in the downstream sector of the petroleum sector which has become a racket. However, we have also always argued that its removal is a major economic decision with implications for the social wellbeing of most Nigerians hence should not be handled with levity. This was why we opposed the strange proposal by the federal government to pay a monthly subsistence allowance of N5,000 to each of 40 million poorest Nigerians. By a simple commonsense arithmetic, the money projected to be paid out as subsistence allowance is higher than the net receipt from the subsidy removal.

We find it particularly curious that President Buhari who presented and read the 2022 Appropriation Bill to the National Assembly last October and went ahead to sign the approved 2022 budget in December did not know that the fiscal document made provision for subsidy removal mid-year. While we are not opposed to government bowing to wise counsel by suspending subsidy removal ‘because the timing is wrong’, we consider it scandalous that there was no agreement among top echelon of the government on such a policy decision that had been written into the PIA law and the 2022 Appropriation, both of which were assented to by the president.

Overall, the subsidy removal project and its implicit economic and social dislocations require more serious homework on the part of government than the current usual knee jerk model. Now that the implementation of the policy has been pushed to the next administration, we hope it can become a campaign issue in the coming 2023 general election.