Editorials Opinion and Analysis
Cushioning effects of fuel subsidy removal
6th January 2012
By Anonymous
At last, the fuel subsidy issue has been laid to rest with its removal by government January 1, 2012. Expectedly, the action, which analysts have described as ‘very courageous’, has evoked mixed reactions from across the country.
While some people, particularly the masses, say it is a loathsome New Year gift from government to its people, others hail it as a new dawn for the nation’s oil sector and, by extension, the economy which depends almost 100 percent on the black gold.
We salute government’s courage in removing the subsidy because we see hope in that action; we see an end to deep-seated corruption in a system that nourishes just a clique of individuals to the detriment of the larger group of citizens; we see local and even Foreign Direct Investment coming in this otherwise viable sector that had been held down by a mindless cabal; we also see competition akin to what obtains in the telecom sector where service efficiency drives and determines demand and price.
We are however, not unmindful of the immediate pain Nigerians are being put through, more so when they were not psychologically prepared for the removal when the announcement was made. The sudden increase in pump price at fuel stations by well over 150 percent; the jump in transport fares, price of foodstuff among others, which invariably rubbishes household disposable income, seem to be too much for a people to bear in one fell swoop.
Government had, in the course of communicating the subsidy removal to Nigerians, made some promises which it said represents the benefits citizens are to enjoy if the subsidy is removed. Infrastructure , including construction of roads, provision of water and constant electricity top the list. Government has set up a committee of eminent citizens to manage the proceeds of the removal. These are necessary and commendable promises.
Much as we urge Nigerians to give government the benefit of the doubt that it would not renege on these promises, we also want government to show responsibility by doing all it has promised to do. In all its efforts at convincing Nigerians to accept the subsidy removal, government did not spare a minute to clarify on the projects—how and when it intends to execute them with the subsidy savings.
Government should explain to Nigerians how it plans to execute those projects, giving timelines as to when a particular project is to be started and completed.
We note that some of the projects government wants to execute such as the second Nigeria Bridge it mentioned are those that might start materialising in the next 12-24 months. The mass of Nigerians need immediate palliatives to cushion the effect of the subsidy removal. We therefore, urge government to adopt the Lagos State model of public-private partnership (PPP) initiative in transport sector.
The cost of governance in Nigeria is the highest anywhere in the world. By removing the fuel subsidy, government is asking Nigerians to make a sacrifice and it is yet to be seen what sacrifice government on its part is making. To prove to Nigerians that it means well, we also want government to cut the cost of governance at all levels, including the cost of running the legislature.
We believe one of the greatest problems the government has in convincing Nigerians is how to erase the age-long distrust between our leaders and the citizenry. It is therefore imperative for President Jonathan to rebuild this trust by cushioning the effects of fuel subsidy removal.
