Subsidy Removal: Introduce Palliatives To Cushion Effect, Experts Tell FG

With fuel pump price hovering between N488 to N600 per litre, following subsidy removal on petrol, economic and finance experts have called on the federal government to introduce Palliative that will cushion the effect of the fuel price increase on Nigerians.
The experts who spoke to NATIONAL ECONOMY yesterday, noted that, though, the action will inflict pains in the lives of Nigerians, especially, as cost of living are expected to skyrocket, they believe the removal seems the sane option to rescue the economy in the wake of mounting national debt and draining revenue.
On his part, the CEO of Centre for the Promotion of Private Enterprise(CPPE), Dr. Muda Yusuf, said the impact of the subsidy removal is currently visible in the price increment of fuel and transportation, adding that, this is short-term impact which is expected.
“The government now needs to move to the phrase of palliatives. Yes, we should not go back on this, but we should now do something about palliatives, palliative that you bring down the cost of living generally, cost of food, cost of transportation, import duty on vehicle and import duty on renewable energy.”
He urged the government to be fast on availability of electricity supply so that when people do not have reason to fall back on the use of generators, the demand for fuel will be less, saying, ‘These are things the government needs to quickly do to mitigate this current situation and I can say that this current situation are likely to be temporary.’
On his expectation in the next few weeks, he said, “We expect that fuel price will go up and transportation fare to go up. This hike in prices will not last for long. The prices of fuel may not go to pre -subsidy level but it is not going to remain as high as it is now, because right now there is short fall on supply side and panic buying.
“Within the next few weeks, we will be getting close to an equilibrium price, and the price of fuel may likely be much less than what we are experiencing now. At equilibrium, there will be much competition and supply in the market and this will have a moderating effect on fuel prices.”
On his part, the head of financial institutions ratings at Agusto&Co, Ayokunle Olubunmi, whilst noting that the removal is something the country needs at the moment, said its impact on citizens will be drastic.
According to him, the full removal will see inflation, which is already at a high level further rise to above 40 per cent. Inflation currently stands at 22.22 per cent as at April 2023, the highest level since September 2005 when it was 24.31 per cent.
“In a country where you are already having inflation of 22 per cent, and you want to move fuel price from roughly N200 per liter to something between N600 to N700 per litre, inflation will jump as high as even 40 per cent, although, it will come down eventually.
“I believe that full removal of subsidy is going to be counterproductive. I will rather prefer an idea of increasing it gradually so people can easily get used to it, it can be moved to like N250 and gradually remove the subsidy before December.
Meanwhile, road transport workers have called on the on the leadership of Nigeria Labour Congress {NLC} and Trade Union Congress (TUC) to intervene so that Nigerians will not be exploited by oil marketers and filling stations who are selling old subsidised stuck in new fuel pump price.
Speaking with NATIONAL ECONOMY during a march rally organised by the road transport union on Wednesday, in Lagos, the members of labour union said the best thing NLC and TUC should do now is to storm all filling stations who though have old stock which have been subsidised till June, yet jacked up the price.
Comrade Idris Idris wondered why umbrella unions, TUC & NLC should allowed Nigerians to be exploited by oil marketers and filling stations whereas they are selling old stuck.
Similarly, Mrs Ajoke Shina, blamed the development on President Tinubu’s hasty pronouncement over what ordinarily should elapse by June.
“If not for mischievousness, why should Buhari push the removal of subsidy which he did not do in seven years to new regime within few days of leaving office. And Tinubu played into set trap meant to create problem between Tinubu and the masses at the dying period of his regime. Tinubu also shouldn’t have used such statement as welcome address to the nation.
“But labour unions should embark on picketing of all filling stations to force them to bring down the price since they are still enjoying the subsidised products. Already all filling stations have jacked up the price, NNPC at Ojodu openly showed price as N488 per litre, while some are selling at N500 in other stations,” she pointed out.
Earlier, NLC has warned federal government against toying with patience of Nigerian masses with the subsidy removal.
NLC president, Comrade Joe Ajaero, who expressed the displeasure of Nigerian workers over removal said, “NLC is outraged by the pronouncement of President Bola Tinubu removing ‘fuel subsidy’ without due consultations with critical stake holders or without putting in place palliative measures to cushion the harsh effects of the ‘subsidy removal.
“Within hours of his pronouncement, the nation went into a tailspin due to a combination of service shut downs and product price hike, in some places representing over 300 per cent price adjustment.
“By his insensitive decision, president Tinubu on his inauguration day brought tears and sorrow to millions of Nigerians instead of hope. He equally devalued the quality of their lives by over 300 per cent and counting.”
He, on behalf of the union, demanded immediate withdrawal of this policy because the implications of this decision are grave for security and well-being.
In the meantime, NATIONAL ECONOMY correspondents who visited filling stations within Lagos and neighbouring Ogun State yesterday, reported that fuel pump price hovers between N488 and N600.
NNPC retail outlet at Falomo, Ikoyi area of Lagos sold PMS at the rate of N480 earlier on Wednesday as the long queue stretched towards Falomo bridge.
However, it adjusted the price to N488 in the afternoon even as filling stations on Ahmadu Bello Way, Victoria Island, which include; MRS. sold at N490 per litre and Mobil filling station selling at N488 per litre. Oando in Marina sold at N490. Former Oando, now NNPC, Marina, is selling at N488.
Meanwhile, motorists lamented over the instantaneous hike of the price of petrol by filling stations and oil marketers describing it as ludicrous. This is even as some of the cars on queues across filling stations left in anger without purchasing fuel when they learnt of the price hike.
Expressing his dissatisfaction, Mr. Boniface stressed that, “this is so sudden, imagine leaving the house at 5 AM and this is 2:10 PM, there is nothing that warrants over 300 per cent increment that Nigerians are experiencing because looking at it, do Nigerians’ earnings correspond with the relative increase in the price of the commodity?”
He, however, opined that this sole act has put so many Nigerians into poverty, as this should have been in the phases, so that, Nigerians will know how to ameliorate this as a monthly notification would be better for all involved.
“I support this government and the removal but this is not the way to do things, as it has put a lot of Nigerians into poverty and deprivation,” he stressed.
A car driver, Andrew Onoja, said, he canceled the order he received because there was no fuel. “On Tuesday, I queued at MRS station from 9 a.m. to 6 p.m. just to get fuel. This is not funny at all. I believe the timing is wrong and has created panic buying. It should have been a gradual thing. The government should have informed the citizens and also carried the marketers along.”
An e-hailing cab company, had earlier announced that the fuel situation has reduced the operation of its company to about 60 per cent.” We have carried out a major cancellation because our pilots were unable to get fuel to transport those who had booked their services back to their destination. Aside from the scarcity, the increase in the fuel price has also affected our partners, who provide us with the vehicle.
W“The high cost of fuel is not commensurate with the pay we get now. And if we renegotiate with our partners, it will affect the cost per seat, and most of our users had booked before now, and we cannot tell them to increase the price,” the e-hailing cab company said.