THEWILL EDITORIAL: Is Oil Subsidy Gone for Good!

FILE PHOTO - A gas pump is seen hanging from the ceiling at a petrol station in Seoul June 27, 2011. REUTERS/Jo Yong-Hak/File Photo

BEVERLY HILLS, June 25, (THEWILL) – There is no iota of doubt, among most Nigerians, that the recent announcement that petrol would no longer be subsidized is one of the positive decisions taken so far by the President Muhammadu Buhari Administration.

A contentious practice that has been in place for decades in the country, removal of the subsidy on petrol in Nigeria had, until recently, become a herculean task for successive administrations.

A bold attempt by former President Goodluck Jonathan in December 2011 to confront the ‘monster’, which the practice had become, headlong, was met with mass protests and demonstrations across the country for many days in January 2012.

The then Vice President, Namadi Sambo, who was also the chairman of the National Executive Council, had announced the Federal Government’s plan to finally remove all forms of subsidy on petrol with effect from January 1, 2012.

But political opponents of that administration played on the vulnerability of poor Nigerians, who felt uncomfortable with the over 120 per cent hike in the price of petrol as a result of the announcement, by leading them into the streets in a protest that lasted for many days in different parts of the country until the federal government was forced to rescind the decision.

However, the fuel subsidy regime continued to be rocked with controversies bordering on gross abuse and massive corruption with Nigerians calling for a stop to the practice, which had also become a drainpipe on the lean resources of the country.

Trillions of Naira had been paid out to petrol importers as subsidies in the country over the years with the Nigerian Extractive Industry and Transparency Initiative putting the 2018 payments alone at over N722 billion.

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Though a promise was made at the inception of the Buhari administration in 2015 to stop the programme, it only remained a mere rhetoric, as there was no political will to walk the talk.

A feeble attempt was made in 2016 but could not be pulled through as the cabal benefitting from the subsidy regime blackmailed the government into submission with the Nigerian National Petroleum Corporation subtly reclassifying the subsidy payment as “under-recovery” costs in its expenditure books.

Nigerians therefore heaved a sigh of relief, recently, when the Group Managing Director of NNPC, Mele Kyari, dropped the good news and cleared whatever doubts were remaining on the controversial fuel subsidy.

“There is no subsidy and it is zero forever, going forward there will be no resort to either subsidy or under-recovery of any nature,” the GMD said while speaking on a programme broadcast by Africa Independent Television.

According to Kyari, “NNPC will play in the marketplace, it will just be another marketer in the space. But we will be there for the country to sustain the security of supply at market price.”

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The announcement and clarifications also came at a time the pump price of petrol was reduced from N125 to N123.50 from the initial N145 price at the beginning of the year due to the vulnerability of the oil price in the international market as a result of low demand caused by COVID-19.

While we commend the NNPC and the Federal Government for being courageous enough, this time, to confront the monster the subsidy regime had become, we are glad that the interest of poor Nigerians is now being taken into consideration, especially with the reasons adduced for the latest decision.

THEWILL also joins other leading organizations in the country in applauding the new direction at NNPC, which also coincided with the publication of its audited accounts and those of its subsidiaries and business divisions for the very first time. We really commend the new thinking, as it is, no doubt, a step forward for transparency in the nation’s oil sector.

THEWILL therefore implores the NNPC, the Buhari and future administrations to sustain the new policy and ensure that fuel subsidy is truly gone for good in Nigeria and nothing should no matter the circumstances, make the decision be rescinded in the future.