The lingering fuel scarcity currently going on in the country, coupled with the ongoing crisis between Russia and Ukraine has put Nigeria in a tight corner amidst rise in the price of crude oil in the international market, which calls for holistic approach by the government to curtail the accompanying negative effects. Petroleum as the major source of foreign earnings has been on the increase, which is a good thing considering how our treasury has been hit with dwindling petroleum price.
However, as the increase in price so is the increase in the amount used to subsidize the product, since we only import our refined product from abroad for domestic consumption. The government uses huge amount of money as subsidy to cushion the disparity between the landing cost and the actual retail price the product goes for in the local market.
How much will Mele Kyari and NNPC announce as petrol subsidy cost in February and March? In January alone, it was N210 billion with oil at $80 per barrel. Now that the crude oil is selling above $100, by the end of March, NNPC will likely tell us that 700bn was spent on subsidy.
The money used for subsidy is to the detriment of other sectors that requires urgent attention. Lagos – Ibadan expressway costs N167 billion, we are still looking for money to complete the road. Capital budget for healthcare in 2022 is N194 billion.
Each month, we gulp a 150km eight lane highway. By the end of the year, we would have swallowed 12 super highways totaling 1800 kilmetres or 50% of the cost of Lagos – Calabar coastal rail.
The subsidy regime in the country has been run over several decades like a scam, that now, whatever happens to the price of oil in the international market, the average Nigerians will be at a loss. If the price goes down, the country is unable to earn sufficiently, as such we don’t have the money for important national investment. If the price goes up, we cannot afford the subsidy that will be needed to keep the price affordable to an already traumatized populace since this according to many analysts is tantamount to profligacy.
Nobody knows the exact amount of petrol we consume monthly. As in nobody. We were playing around 30 million litres with the last government, we moved to 60 million litres and NNPC even talked about 103m litres while discussing the unsustainability of retaining subsidy. We do not know if some vessels are diverted to other countries. Meanwhile, refined products keep finding their way to neighboring countries, while Nigeria keeps paying subsidy.
Honestly, I have looked for every reason to support the subsidy on petrol, I could not find any. Whatever the case is, the economic development of the country must not be sacrificed on the altar of politics. End the subsidy scam.
