Protests and Responses on Removal of Fuel Subsidy in Nigeria

Protests and Responses on Removal of Fuel Subsidy in Nigeria – Since the beginning of June, Nigeria faces serious crises on fuel. It is not that the country is lack of fuel resources, but the price has increased significantly. As for the resources, Nigeria is not lack of the sources because until now, Nigeria becomes Africa’s largest oil producer. However, Nigeria can only produce the raw materials, but the country is lack of refinery so the petroleum is always exported for refinement and then Nigeria imports the fuel back with higher price. Thus, this leads to serious burden on national budgeting. Because of that, the new president of Nigeria, Bola Tinubu, declared that there will be no longer fuel subsidy for Nigerians and the budgets will be allocated in other sectors that can support the development of the country. The statement was made in early June but it would only be active in the end of June. In fact, it has become one of the Tinubu’s main programs during his campaigns. Even if the policies and regulations were still not officially released, statement said by Tinubu has made Nigerians restless and publics start the panic buying of fuels.

In his inaugural speech, Tinubu clearly said that fuel subsidy is gone. He made the decision because the subsidy is no longer sustainable for the country and this can be allocated for other sectors to bring better development for the country. Tinubu said that the subsidy will be channeled to infrastructure, healthcare, education and jobs. Thus, the subsidy will be able to improve Nigerians’ lives materially although there is no fuel subsidy anymore. Because the subsidy is removed, increase in fuel’s price is the real consequence and Nigerians are not ready for this.

Nigerians are surely shocked by the statement of Tinubu. For many years, people of Nigeria have enjoyed cheap price of fuels and this has lasted for decades. Moreover, many industries also enjoy the subsidy that lessens the economic hardship in the country. With the low price that occurred for decades, it is not surprising that Nigerians protest on Tinubu’s decision. In 2012, government also tried to remove the subsidy for fuel and this caused huge protests in the country that made the government decline the policies.

As what is mentioned, Tinubu’s statement led to panic buying. Many fuel stations had people lining up to get fuels because people were afraid that the fuel’s price would increase without them knowing. Because of that, government responded and stated that subsidy will officially end on June 30. However, government also said that they could not stop the gas stations that raised the prices because of the panic buying and situation after Tinubu’s statement, even based on some reports, some gas stations had decided to stop selling the fuels.

Regarding the new fuel’s price, Nigerian National Petroleum Corporation or NNPC has confirmed that adjustments of prices have been made. Retail prices have been calculated by the NNPC but the corporation has not disclosed the new prices to public as it still needs to wait for the government’s regulation. However, price adjustment has been made in some NNPC retail stations in Abuja. The adjustment made the price skyrocketed. The prices are almost three times the former price before the removal of fuel subsidy.

Tinubu’s and government’s decision in removing the fuel subsidy is not without reasons. In addition to the subsidy that has become huge financial burdens for the country, the government also wishes that the removal of fuel subsidy will attract greater investment from investors in the sectors of oil and gases. As what has been known, Nigeria is one of the largest oil producers in Africa but the country cannot process and refine the raw materials so the only option is to export them and then import the refined oils and gas. By having investors, it is expected that refineries can built in Nigeria that later can suppress the price of fuels in the country. In addition, fuel subsidies for many years have made the country unable to develop and even these make serious cases of corruption and abuse. However, negative responses emerged among Nigerians. The Nigeria’s Labour Congress also strongly disagreed with the Tinubu’s decision. The congress is said to be outraged because of the subsidy removal and the congress demanded the government to withdraw or cancel the statement. Even, Joe Ajaero as the leader of the congress said that Tinubu brought sorrow instead of hope in his inauguration day.

In addition to the Nigeria’s Labour Congress, analyst Sam Amadi also said his negative responses on the subsidy removal. He said that the policy will only bring higher hardship for citizens. Currently, citizens have faced inflation and high living costs and these will only be worse with the removal of subsidy on fuel. Amadi said that that the decision of government will make transportation costs raise up to 200% and people will fall into poverty that lead to increases of crimes. In the end, these will only damage economic recovery in the country. Amadi added that fuel subsidy is actually unsustainable and it cannot be prolonged. However, he thinks that removing it abruptly is reckless decision.

As for the subsidy, it is true that huge burdens fall into government. Fuel subsidy can reach 400 billion naira or similar to $867 million every month. This is surely huge costs.

Tags: Nigeria, Subsidy