‘Fuel Subsidy Removal Will Promote Industrial Devt, Economic Growth’

Yinka Kolawole in Osogbo

The Director-General of the Nigerian Institute of Social and Economic Research (NISER), Professor Antonia Simbine, yesterday posited that the removal of the petrol subsidy was hinged on  curtailing inflation, promoting industrial development and economic growth, as well as equity.

In her opening remarks at the Institute seminar series with the theme: ‘Why, How, and Way Forward of Fuel Subsidy Removal in Nigeria’ she remarked that the federal government, which recently ended the subsidy regime, was due to the heavy toll it placed on government finances, leaving little space for other national development priorities.

 At the seminar series, many stakeholders also reflected on the politics, antics and fallacies of fuel subsidy removal and the types of compensation mechanisms required to mitigate plausible undesirable effects of the subsidy removal on Nigerians.

However, the presentations are findings of various research contributions by NISER scholars and guest scholar.

The director-general remarked that: “The fuel subsidy question is easily one of the most controversial policy issues in Nigeria for decades.

“Thus, the reflection seminar discussed evidence from the subsidy conundrum and allied issues that persisted for over three decades. Furthermore, the seminar provides a unique platform for providing some brilliant stuff on compensation measures that can mitigate the adverse effect of the subsidy removal.”

Also at the reflection seminar, Prof Adeola Adenikinju and Mr. Louis Chete, chronicled the rationale and the mechanisms of the Nigeria’s petrol subsidy introduced in 1973.

The presenters highlighted the various anomalies around the Nigeria’s petroleum pricing under the subsidy regime with a particular reference to the 2009 and 2020 pricing templates that passed the brunt of inefficiencies to consumers.

The presenters remarked that through various indicators and across the country, analysis and evidence revealed no direct impact of petrol price on inflation trend and household welfare, however, the petrol subsidy benefits the rich and smugglers.

They noted that: “Nevertheless, the post-subsidy era is expected to provide higher economy-wide benefits, provide government workable compensating mechanisms, including e-wallet programme for smallholder farmers, mass transit schemes, digital-enabled cash transfer scheme, free healthcare for the vulnerable, transport vouchers, among others.

 “Some of the mechanisms are new while others are required to be scaled or re-introduced as appropriate. The mix of these strategies will place an appropriate valuation on our natural resources while delivering higher welfare benefits to Nigerians.”