Fuel subsidy
which has became a most contentions issue engulfing the nations political land
scape, dates back to April 1992 when
Ibrahim Badamosi Babangida’s
government raised the price of a
liter of fuel from 15.3 koko to 20 kobo. He did it again on March 31, 1986,
from 15.3 kobo to 39.5kobo, on April 10, 1988 , from 39.5 kobo
to 42 kobo. On January 1,
1989, he increased the price from 42kobo to 60 kobo. Although, the regime said
it was for private vehicles only but the price remained 41k for commercial vehicles. On December, 19, 1987, they moved to a
uniform price of 60 kobo while on March 6, 1991
the price of a liter of fuel was
increased from 60 kobo to 70 kobo
and that was when he stepped
aside in August 1993.
Chief Ernest
Shoneken increased the price of a liter of fuel from 70 kobo to N5 on December
8, 1993 but a hectic mass protest saw Abacha take over power. The incoming regime reduced the increment to
N3.25 and on October 2, 1994, the
Abacha junta increased the
price of
fuel N15 but reverted back following the mass protest.
Then came Abdulsalmi Abukaka’s caretaker
regime that raised the price from
N11 to N25 and on December 20, 1998, it was reduced to N20 after a sustained protect that lasted
till January 6, 1999.
The Obasanjo’s presidency adopted fuel subsidy as the bedrock of its economic policy,
for no sooner than he was
sworn in then effected an
increment to N30 on 1st
June, 2000 but protest
and mass rejection forced it to
N25 and further to N22 by the time he
left office, he raised it to N70.
When president
YAR’ADUA came on board, he reduced the price of fuel to N65.
The Good-luck
Jonathan administration has said it is fuel subsidy removal or nothing” if this
policy sales through, the administration claims it is going to save the nation
N1.134 trillion annually which the government argues that it is going to
channel into infrastructure development it
also argues that fuel subsidy
removal is going to open up the
supply and distribution of
petroleum productions to force the
demand and supply. Other argue that if our refineries are functioning optimally, the issue of fuel subsidy will not arise.
Hon Dakuku Adol
Peter side is worried that the issue is
unnecessarily meeting up the polity
and is condemned to guiding the
house of representative to making
informed decisions on the issue rather
than follow popular opinion and further
stated the benefits that may accrue from
the fuel subsidy removal.
Note: If oil subsidy is removed, part of N1.134 trillion that is spent annually will be used
in re-activating the Nigerian rail way
system which has gone moribund. It is
unfortunate that some people in Nigeria has
never seen a train or travel by
railway except the few opportune to
travel abroad or those that watched it through movies.
OTHER ARGUMENTS FOR FUEL
SUBSIDY REMOVAL
Maintenance / construction of Nigerian
road. Nigeria being a large country, removal of this fuel subsidy will help to
accelerate the construction and maintenance of Nigerian roads since the monies
that had been allied in the construction and maintenance of Nigerian road
so far has not been enough due to the number of roads that needs government attention in the north,
south and eastern parts of this country.
It will create job
opportunities: The Minister of Works Arch Michael Onolememen during
his plea to Nigerians on the need to
embrace government policy on subsidy removal said that the
subsidy removal will create 3000 jobs in
his ministry. This subsidy removal will also engage so many youths in other
sectors of the economy. The youth employment intervention will target large
numbers of unemployed youths from the
poorest population in each state of the federation to FCT. In addition, the level of remuneration will
be such that will ensure the self
selection of only the poor.
A robust
programme structure will be developed
to ensure adequate over sight and accountability. During a
presidential broadcast on subsidy
removal, Mr. President said that he will constitute a board known as “Subsidy
Reinvestment Brand”, consulting firms
with international reputation will be appointed
to provide technical assistance to the board in financial and project
management. Relevant MDAs will set up
project implementation while an independent body will report directly to the board.
Allows for Nigerian to get fuel
from alternative fuel dealers
(competition). Subsidy has discouraged competition and stiffed private
investment in the downstream sector.
Investors have shied away from investment in the development of
refineries, petrochemicals, fertilizer plants etc. the subsidy removal of the
downstream sector of the petroleum industry will lead to rapid private sector
investment in refineries and petrochemicals, which will generate millions of
jobs and lead to increased prosperity
for our people. Subsidy has also created huge
price disparity, which has encouraged smuggling of petroleum products across
the boarder to neighboring countries, where prices are much higher. Nigeria
therefore ends up subsidizing consumption of petroleum products in neighboring countries.
There will be an improved
fiscal space: The withdrawal of oil subsidy will also offer an opportunity
to accelerate investments in critical
infrastructure that will directly spur economic growth, job creation and will be consistent with the
present administrations transformation agenda to achieve
the preset administrations
transformation agenda to achieve the
vision 20:20:20 which Nigerians are craving for.
Water and Agricultural
Development: Subsidy removal will harness
Nigeria’s abundant water resources for national development through sustainable food production and water conservation.
This component according to the Minister of Agriculture Dr Adewumi
Adesina will actualized the current
policy thrust towards self reliance for
rice and other food production and
enable the agricultural value chain
transformation to be achieved. He equally stated in a chat will political
platform that the revitalization of the irrigation projects will increase local
production of rice by over 400,000 tons per year, thereby reducing the
importation of food in Nigerian . This will further ensure better food
security for the country and improve
human nutrition and health and
will further enhance job creation by all
year round employment generation.
Need to address
urban/ rural water supply projects: the
proceed from subsidy removal if save and part of it reinvested in water supply projects will
increase the level of portable water
supply available to about 10 million
people. It will also increase the national access to
water supply form current levels of 58% to 75%
and will contribute to a reduction in the infant mortality rate due to
improvement in sanitation and reduction in water borne
diseases. This is as submitted by Hon Minister of Water Resource, Mrs. Sarah
Ochekpe at Federal Executive Council meeting.
Enhancement of power supply:
in a briefing federal ministry of power made by Prof Barth Nnaji on the
need for workers to embrace government
policies, he stated and I quote “the
component of subsidy removal will
contribute towards the power sector reforms by improving the generation
capacity through hydro and power mants” unquote. The programme will provide counterpart funding for
the contraction of the large mambilla hydropower project that will generate an additional 2,6000 megawatts of electric power. The programme will also provide funding to
complete a total 17 small and medium hydroelectric power project
with a cumulative capacity of 140.273 meg watts. This will provide counterpart
funding for P.P.Ps with the private
sectors for development of coal power
projects in Enugu, Benue, Kogi,
with a potential to generate
1000 megawatts of power.
Facilitation of ICT: In one of the workshops jointly organized by
ministry of youth development and ministry of communication technology to
facilitate the build out critical aspect
of ICT infrastructure in Nigeria, the hon. Minister of Communication Technology
Mrs Omobolaji Johnson stated that the proceeds from oil subsidy will be beneficial to youths in the
following way:
a.
The fund will be used to boost broadband connectivity
at the transmission layer of the national infrastructure using failure, which
unlike microwave delivers higher broadband sped at the access network, lead to
more affordable and better quality of communication services.
b.
Will extend ICT connectivity to all tertiary
institutions in Nigeria through establishment
of e- teaching and e- learning platform
c.
The initiative
can generate 70,000 new jobs spread
across the six geopolitical
zones, over 60% will be concentrated in the north that has higher
connectivity advantage.
ARGUMENT AGAINST FUEL SUBSIDY REMOVAL
Over the years, our leaders had failed s repeatedly over implementation of prom
ises. Nigeria is
known for good blueprints on whiles and programmes but execution an
implementation of those policies is always a problem .
Based on this
experiences, Nigerians are living in fear of being heated with subsidy removal.
Subsidy removal
in the oil industry according to some Nigerians may not ensure effective an
deficient streamlining in the sector in a transparent and growth oriented
manner
In January Nigeria partly removed subsides for
fuel, increasing the price of petrol by
50 percent to 97 naira ($0.60)
from 67 naira which had an inflationary impact
by pushing up the cost of transport,
food and other goods.
Before the
removal of subsidy in January, 2012 Samusi
had on November, 2011 told
renters that inflation could hit
14-15 percent up from
10.3 percent by December2011
before falling to single digit in late 2013 . Inflation impact
of the subsidy removal in January could be a “bit exaggerated” he said.
There is also the fear that the political heavy
weight will capitalize on subsidy and
cause more untold hardship to the poor masses of the
country as the rich gets
richer and the poor getting
poorer.
CONCLUSION
The removal of
fuel subsidy will help in a speedy acceleration in agriculture, education,
health sector, water supply, power
sector, road and rail transportation
sector and youth empowe4rment programmes
will not only head to transformation of public infrastructures in Nigeria, but will also ensure the gainful employment
of millions of Nigerians who were
hitherto unemployed.
This will
enhance the socio economic well being of
our dear Nigerian people.
REFERENCES
An Extract From a Paper Presented by Mrs. Mobolaji Johnson; Hon Minister of Communication Technology.
Extract Form Citizens Advocate of January 21st 2012 Prof. Barth Nnaji; Hon Minister of Agricultures Statement on Positive Effects of Subsidy Removal.
Hon Dakuku Peterside’s Stands on Subsidy Removal Federal House of Reps. Newswatch of 22nd December, 2011.
Submission by Mrs. Sarah Ochekpe; Hon Minister of Water Resources at Federal Executive Council Meeting
Questions readers are likely to ask:
TRACE THE INTRODUCTION OF FUEL SUBSIDY IN NIGERIA; ARGUE FOR AND AGAINST THE PLANNED REMOVAL.