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Thursday, August 11, 2022

Politics of Oil Subsidy

SINCE the inception of democratic governance in Nigeria, the issue of oil subsidy had been in the front burner of the nation’s economic deliberations. We observe that while the ruling party always insists that high amounts of the nation’s revenue goes into the payments of subsidies for supplied refined crude oil products; the opposition party had always concluded that the payment of oil subsidies have been unnecessary for the sustenance of the economy. So, while governments in power had insisted that oil subsidy payments were real, legal and inevitable, the opposition had always referred to it as a scam. However, whenever the opposition takes over government, oil subsidy is perceived as a necessary evil. Nigerians are uncertain on whom to believe.

WHICHEVER way it is, it is certain that oil subsidy payments have negative effects on the wellbeing of the nation’s economy. For example, Nigerians had been informed that government spent N10.413 trillion on fuel subsidies between 2006 and 2019. In 2020, petroleum was subsidized to the tune of N450 billion while in 2022 alone, the total cost of subsidy in January and February was N396.72 billion. By inference, there has been 349.42 per cent from N350 billion in 2019 to N1.573 trillion in 2021, and still rising. As at today, the Petroleum Industry Act (2021) which could have arrested the parasitic subsidy is seemingly jettisoned thereby stalling the total deregulation of the Petroleum Sector and consequently hampering the total exit of the oil subsidy conduit of capital flight.

WE are therefore unamazed, though alarmed, that the nation’s deficit spending in the first quarter of 2022, has increased to N3.09 trillion, while the nation’s revenue has not exceeded N1.6 trillion. With 21 per cent of total expenditure going for debt service, and 34 percent of total revenues; we are less surprised because we had warned the Federal Government on her penchant for low performing exorbitant loans, economic stifling conditionality of, high interest rates and delirious payment plans.

AS always, the unprepared Nigeria government would be ready to point accusing fingers at the Russia-Ukraine war and high exchange rate of the Naira to the American Dollar which has increased international cost of crude oil. But that should have been an economy booster for the nation, if the call for the revamping of the refineries and the development of our gas sector had been heeded.

THE lackadaisical attitude of government then and now seems to suggest that a cabal in power benefits immensely from the politics of Oil Subsidy. This suspicion could have been curbed by the publicization of the names, and owners of benefitting organisations and the amounts credited to each within each quarter of the year.

RATHER than give accurate statistical data of the volumes of premium motor spirits and other affiliated products, Government had continued the guessing games of how many volumes of fuel we consume daily in Nigeria. With no accurate data, a forensic audit of the subsidy transactions might readily reveal that Nigeria is paying for what was never brought into the country.

IN more than two decades of democratic rule, it is disheartening to note that government had consistently neglected our source of national income. With the level of uncovered corrupt cases in the country, it is evident that increased cost of living, galloping inflation and increased fuel pump price would not be the outcome of fuel subsidy removal.

All these are already happening at increasing and alarming rates. The truth is that if government could fight and truly prevent corruption, the removal of fuel subsidy and the mystery surrounding it; would not amount to the projected economic Armageddon that citizens are made to fear.

THE Hope insists that our government should desist from pushing the nation and here citizens into economic hara-kiri, and hence should stop the fuel subsidy programme in due season. If the money saved from the stoppage of subsidy payments is put into the overhaul of the refineries, and government sincerely and vigorously pursues the programme of alleviating the discomfort that the removal portends, Nigeria(ns) would be better for it in the long run. Before Nigeria plunges into economic colonization, it is high time the entire fuel subsidy programme was done away with and workable peoples’ welfare oriented programmes are designed and implemented.

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