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 PPPs 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 promises. 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.