Fuel Subsidy Withdrawal As A Catch 22 Situation For President Tinubu.
There is clearly, a mixed of complimentary and the not-too-rosy view among Nigerians of President Bola Ahmed Tinubu with regards to the decision to withdraw government's subsidy on the premium motor spirit, PMS, more commonly known as petrol or, fuel. That is, the heart beat and the main propellant of the social and economic activities of the nation as well as, of the survival and wellbeing of the citizens.
One wonders why the APC's immediate past government of Muhammadu Buhari left the harculean burden as a legacy and an albatross that his successor could not have avoided but to bear. The provision for the subsidy regime contained in the 2023 national budget was primed to end in June, less than a month after Buhari's exit and the handover to Tinubu.
Therefore, President Bola Ahmed Tinubu did not have any other options than to take on the task and to courageously make it a component of his very inaugural address after his swearing in. It was either an act of malicious designs of planting a landmine or, it was a reflection of the trademark of PMB of shifting and abdicating his responsibilities. For the Jagaban Borgu, it was a typical scenario of a Catch22 situation.
That is not to say however, that the administration of Ahmed Tinubu would not have decided to, in anyway, take on the behemoth of the fuel subsidy, at a point in the future by way of doing away with it. But knowing the Asiwaju for who he is, a dexterous and meticulous strategist, this writer believes that he would have gone about it, after due planning and streamlining preliminary actions to cushion the inevitable adverse effects of pains on the populace.
If it had been properly and meticulously planned, the resulting hyper inflation and near economic anarchy now in the country would have been averted or, at least, mitigated. That is to say that, instead of the haphazard and chaotic implementation, President Muhammadu Buhari and his team that advised him to stop the oil subsidy should have laid the right foundation before doing so.
Perhaps, it is imperative that that we at this juncture, pulse to ask and understand basic questions and concepts, the pros and cons of oil subsidy and the decision of successive governments to discontinue with it. Why are opinions divided with some people in support and others against it?
If President Bola Ahmed Tinubu should stick to the decision to terminate the subsidy, what must his administration do to mitigate the immediate adverse effects and to guarantee the anticipated long-term benefits?
In a nutshell, subsidy by the government on oil implies the policy of paying for the difference in the actual market price of the product and the rate, the pump price, it is sold to the consumers. According to official figures, the government pays the sum of 202 Naira on each of the 65.5million litres of PMS daily consumed by Nigerians. This translates to a whopping 400 Billion Naira every month. Multiply that by twelve and it comes to a staggering average of 6Trillion Naira yearly paid out to marketers of PMS by the government in the name of subsidy!
Successive governments and the advocates of withdrawal of subsidy argue that the huge sums consumed by the subsidy could have been better expended in boosting the critical sectors of agriculture, health, education and infrastructures. It is also argued that the greatest number of citizens do not reap benefits of the subsidy, but a tiny minority of people within the corridors of power, their cronies and foreign collaborators.
Exponents of withdrawal of subsidy further point to the activities of smugglers of the PMS to neighbouring countries where they make stupendous profit margins. This is because, because fuel in Nigeria is subsidized, it is very lucrative business for those involved in illegal cross border trade as the product's price is much higher in the countries where they sell.
Finally, the endemic corruption surrounding the management of the fuel subsidy has been strongly advanced to support the demands for its stoppage. As it has been severally reported over the years, the huge sums allegedly spent on subsidizing imported refined petroleum products are usually bogey or fake. Officials in the relevant departments of government in connivance with socalled importers to siphon humongous sums of money in the name of shipment and consignments that were not made in actual facts.
Those opposed to the withdrawal of subsidy on petroleum products especially PMS, strongly argue that being the bedrock upon which almost all the sectors of the economy are built, the resultant spike in the cost of energy will have skyrocketing effect on the cost of production and service deliveries.
Ensuing from the hyperinflation due to the high cost of economic activities, it is pointed out, the brunt of the hardship will be borne by the poor segments of the nation's population. This set of people gives the example of small-scale entrepreneurs and providers of everyday essential services who would be forced out of business or hike the prices of their products and services in order to break even.
Very significantly, using the same premise of the existence of the cankerworm of corruption in the oil industry, opponents of the oil subsidy withdrawal argue that, the poor masses should not be made to suffer the consequences of the criminal acts of the elite.
Moreover, there is no guarantee hey contend, that the funds withdrawn from subsidizing oil will be properly and meticulously spent in the development of the identified critical sectors of the economy. Corruption, it is pessimistically posited, that the same culture of perfidy, corruption and lack of patriotism of the ruling elites will also rubbish whatever are the noble intentions in channeling the funds saved by the withdrawal of subsidy on petroleum products.
On the whole, both sides of the divide have very strong points to buttress their views on the question of whether or not, the fuel subsidy should be removed or retained. But, looking at the situation objectively and devoid of sentiments and unrewarding semantics, the cold and cogent fact is that, the long reign of the regime of oil subsidy is over. From the pronouncement of the President on his swearing in on the 29th of May, 2023, we have reached a crossroads as a nation and we take the bull by the horns by moving on the most clearly intelligent path. It is indeed a watershed.
In the circumstance, President Bola Ahmed Tinubu has no choice other than to surge ahead. There is no looking or going by back. If the failure of the immediate past political dispensation to implement the subsidy withdrawal long before was a result of tardiness or, it was a deliberate ploy to plant booby traps and banana peels, it has all the same become a historical task that is incumbent on Asiwaju to fulfill.
It is expected that his administration will very quickly adopt policy measures aimed at cushioning the adverse effects of the new regime of no subsidy on oil. Fiscal strategies carefully crafted and faithfully managed by honest, intelligent and patriotic men and women should be gathered to assist with the steering of the economy away from the prospects of hyperinflation, extreme poverty of the citizens, collapse of industries and a devastating devaluation of the nation's currency.
He must be courageous, steadfast and singleminded in his commitment to guard against the antics of entrenched interests, who have been so dependent on feeding fat from the loopholes in the management of the oil subsidy. He be on the lookout for the machinations of adversaries who will certainly try to make political capital out of the situation.
To the new man at the driving seat of the ship of our country, history beckons. And very surely, with his demonstrated remarkable track records of a deft and astute goal getter, Nigerians should be confident in a bright and prosperous nation in no distant future under President Bola Ahmed Tinubu.
Dahiru Yusuf Yabo was Commissioner of Commerce, Industries and Tourism Sokoto State and former Investigation Officers with Nigerian Custom Service (NCS)