‘Phased Implementation of Oil Subsidy Removal Would be More Prudent’

Ugo Aliogo

Africa Leadership Group (ALG) has stated that a phased implementation of the subsidy removal would have been more prudent, allowing citizens to plan and adjust their budgets accordingly.

The group in a statement signed by the Director of Publicity and Media Relations, Africa Leadership Group (ALG), Lara Gureje-Oderinde, said the immediate effects and impact of the removal have been hard on many families, leading some to abandon their vehicles due to the high fuel prices.

The statement explained that the citizen survey also confirmed that the government should consider investing a portion of the 500 billion naira in climate-smart agriculture pilot food production initiatives in different geopolitical zones so as to enhance food security and reduce dependency on imports.

The group charged the federal government to prioritize the well-being of its citizens, especially in terms of food security and transportation, adding that a fair and equitable transition towards a sustainable and economically secure future can be achieved by carefully planning and implementing measures to mitigate the immediate effects of the subsidy removal while simultaneously investing in long-term solutions.

The statement further explained that the decision to remove the petroleum subsidy regime, as declared by President, Bola Tinubu in his inaugural address, has had immediate consequences on the prices of goods, essential services, and food items, causing significant worries among millions of Nigerians, and the sharp increase in transport fares has added to the burden on citizens.

The statement further stated that the impact of increasing domestic fuel prices on the welfare of households arises through two channels, adding that households face the direct impact of higher prices for fuels consumed for cooking, heating, lighting, and personal transport.

It averred that the indirect impact is felt through higher prices for other goods and services consumed by households as higher fuel costs are reflected in increased production costs and consumer prices.

According to the statement, “In response to the outcry from Nigerians, the administration proposed to disburse 500 billion naira to 12 million households over 6 months. However, some analysts believe that this approach does not adequately address the fundamental issues and impact resulting from the subsidy removal.

“Africa Leadership Group (ALG), a citizen-centric, and effective governance leadership organization conducted a survey to gather citizens’ opinions on how best to spend the 500 billion naira. The top three priorities identified by the citizens were: Federal government should invest 48.7 percent in modular refineries to create jobs. While 48.1 percent should be invested in the money in manufacturing or agriculture, with particular focus on small medium enterprises and smallholder farmers. Also, 41.7 percent should be subsidized commercial transportation or buy and distribute new buses to States. Other actionable pathways suggested by citizens include investing in health or education, subsidizing electricity tariffs, distributing funds to the poor through a transparent process, investing in areas affected by terrorism, and focusing on food security initiatives.”