I have long been an advocate of subsidy removal. For me, the most compelling argument in favour of deregulation was that it would allow more players into the industry thus enabling the forces of competition, demand and supply to give people more options, better service and eventually force down the price. As far as I was concerned the other points such as elimination of corruption and freeing up funds for massive infrastructural development were secondary because they could easily be done with subsidy still in place.
Events of the last few days have however given me cause to have a major rethink. The first occurred at a filling station in Jos on boxing day. There I noticed that most people that came to buy fuel were buying for between N600 and N1000 and I knew that was all they could afford. With the removal of subsidy, one can only imagine what these people would do because N1000 will barely fetch you 7 litres!
Then there’s the cleaner in my office who earns N10,000 a month. Prior to subsidy removal, she used to spend N200 a day on transport, which comes down to N5,000 monthly; now she spends N400 a day or N8,000 a month on transport alone!
The vehemence with which government has insisted on subsidy removal despite popular opposition shows that the president is beginning to steel his spine. Some even say he has transformed from weak to wicked. This is because there are simply too many Nigerians that cannot afford this increase and the FGs insistence comes across as callous; people were already struggling to eke out a living and literally cannot afford the new fuel price.
Whatever the advantages of subsidy removal, doing it now is most inauspicious and highly insensitive to the long suffering Nigerian masses. A more humane approach would have been to scale down the 72% recurrent expenditure in the budget (it favours only about 1% of the population anyway) and channel the resources towards rebuilding our refineries.
Government can also help in going after the corrupt cartel in the private sector, NNPC and PPPRA. I’m sure there would be a few billions to recover from there as well.
Leave the masses alone. They are going through enough hell as it is.