The decision by the Nigerian Federal Government to eliminate the long-standing subsidy system has caused significant distress among the population. This move has resulted in a surge in the cost of goods and services, leading to rampant inflation and pushing many into poverty.
President Bola Tinubu, in his inaugural speech on May 29, announced the abolishment of the fuel subsidy scheme. He stated that the current 2023 budget does not include provisions for the subsidy and emphasized that the funds would be redirected towards public infrastructure, education, healthcare, and job creation.
Immediately following the president’s announcement, petrol filling stations across the country raised their prices from N165 to over N500 per litre. This adjustment created an economic imbalance, particularly impacting transportation costs for households.
However, one month after the removal of the subsidy, the promised palliatives to mitigate the effects of this decision have yet to take effect at both the state and federal levels. It appears that Nigerians will have to wait longer before experiencing the benefits of the palliatives promised by the government and the private sector.
According to findings by Sunday Sun, the recommendations of the National Economic Council (NEC), including a proposal for monthly petroleum allowances for civil servants, have not received attention. Governor Bala Mohammed of Bauchi State highlighted the proposed N702 billion cost of living allowance and petroleum allowance as demonstrations of the government’s commitment to supporting civil servants during this transitional period.
However, individuals interviewed regarding the impact of the subsidy removal expressed outrage and frustration. The sharp increase in the price of Premium Motor Spirit (PMS) has significantly impacted their finances. Many have adjusted by reducing fuel consumption, using alternative products, and cutting back on expenses.
The subsidy removal has led to hardships and hyperinflation, particularly in the Southeast region, where fuel prices have risen from N240 to N700 per litre. Goodluck Ibem, president general of the Coalition of South East Youth Leaders, called on the government to implement measures to curb arbitrary price increases and other sharp practices by petroleum marketers. He also urged the government to liberalize the petroleum sector to attract investors for building refineries.
In terms of palliatives, the Depot and Petroleum Marketers Association of Nigeria (DAPPMAN) pledged to donate 100 Compressed Natural Gas (CNG) buses to help alleviate the effects of the subsidy removal. However, the implementation of these palliatives and concrete plans of action are yet to be seen.
Chairman of Innoson Vehicles Manufacturing Limited (IVM), Mr. Innocent Chukwuma, confirmed that his company has not received any orders for the supply of CNG buses from the government. While preparations for the mass transit buses are ongoing, no significant progress has been made.
It is worth noting that the Nigerian government’s autogas initiative, aimed at converting vehicles to run on Compressed Natural Gas (CNG), has faced challenges, including infrastructure limitations, high gas costs, lack of planning, and prevailing economic difficulties.
Overall, the subsidy removal has caused hardships and inflationary pressures for Nigerians, and the promised palliatives are yet to be effectively implemented.