FAREWELL TO FUEL SUBSIDY: Nigeria's bold move to transform its economy and increase transparency.

The removal of fuel subsidy in Nigeria has been a topic of heated debate for many years, with arguments for and against it. The Nigerian government has been spending billions of dollars every year on subsidies in a bid to sustain the fixed price of fuel, which they sell to Nigerians below the actual market price.

Despite the good intention behind the fuel subsidy policy, it has proven to be unsustainable and detrimental to the economy. The subsidy has been bedeviled with corruption, inefficiencies, and fraud, which has cost the country billions of dollars over the years. Therefore, removing fuel subsidy in Nigeria would be a wise move.

The faithful idea behind fuel subsidy is a government initiative that seeks to cushion the effects of volatile oil prices on Nigerians and ensure that they have access to affordable fuel. With this policy in place, the Nigerian government has been able to subsidize the cost of fuel, thereby selling it below the market price, and directly bringing about fixed prices in the market, including transportation, food, and logistics.

However, in recent years, the government have being unable to meet up with these good intentions. Even though most Nigerians value the subsidy because they believe it is a form of social welfare, the increasing dysfunction and inefficiency of the system means that it has become counter-productive and less helpful.

Removing the fuel subsidy would have a positive effect on the economy, as the resources used in subsidizing fuel can be reinvested into developing the country's infrastructure, as well as improving social welfare programs and increase investments in the social amenities, such as healthcare, education, and the provision of other basic necessities. There will be significant economic growth, increased competition, and efficiency in the petroleum industry. The price of refined fuel would be deregulated, and this would attract the necessary investments to revive the industry as a whole.

Do not forget, that, one of the significant benefits of the Dangote refinery is to ultimately end Nigeria's dependence on imported refined products. Nigeria, which is one of the largest oil producers in Africa, has been importing fuel due to the inability of its existing refineries to keep up with the country's demand for refined petroleum products. The new refinery will change the country's oil value chain, hence boosting the economy. 

Additionally, the functioning of Dangote refinery will also enable the government to eliminate fuel subsidies fully. With the refinery in operation, the production of petroleum products will become more efficient, reducing the cost of refining domestically, this will also have a significant positive impact on the Nigerian economy.

The government must be proactive in ensuring that the removal of the subsidy is not seen as a single solution, as it is just one of the many steps to be taken to improve the economy. President Bola Ahmed Tinubu must reengineer the economy to ensure that there are many suitable options that increase prosperity, growth, industrialization, and diversification.

The Nigerian government must recognize that it will be taking a bold step with so many implications. There must be a strategic plan in place to ensure that Nigerians can still afford fuel while boosting the economy's infrastructure, improving social welfare programs, and creating an enabling environment for business growth and sustainability.

The President decision might need too early, but the time is now, and it must be done!

PRINCE TIJANI DAUDA, writes from FCT

01.06.2023.

Email: daudatijay@gmail.com