As against the sheer mass suffering, the Executive Governor of Abia State, Dr. Alex C. Otti has noted that the removal of fuel subsidy is a means of economic survival to the country.
He made this known during his exclusive lecture delivered at the 63rd UNN Founders’ Day Celebration held at Princess Alexandra Auditorium ( PAA), UNN on Thursday, 5th Oct. 2023. UNN Founders’ Day Celebration is an occasion to commemorate the birth of the university which was the first indigenous university in Nigeria.
Speaking on the theme “Fuel subsidy removal: dealing with the challenges, harnessing with the opportunities,” Dr. Otti, noted that subsidy is a market distorting mechanism that creates uncertainty in the extended value chain of the petroleum industry and payment of subsidies on imported products discourages local refining.
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The Governor recalled during the lecture how the country had four non-functional refineries which might have been resulted by subsidy.
According him, lack of investments in the country’s domestic refining has damaged the nation’s economy extensively, cost jobs, stifled growth of ancillary industries and denied the citizens the many benefits of living in an oil producing country.
He lamented that “subsidy has cost the country huge amount of money in the last 18 years, and that the Nigerian government spent an estimated $30 billion on subsidy payment. In 2022 alone, the fee was N4.4 trillion and about 25 per cent of this sum was borrowed. He said ” I see the removal of fuel subsidy as a right decision”
He also revealed that the poor who the subsidy were meant for were never the main beneficiaries.
He noted “the old arrangement which only approves subsidy payments for imported petrol meant that the complexities of the subsidy regime encouraged a lot of unwholesome practices.
“The major beneficiaries were elite businessmen, those who can pool the resources.”
He concluded by stating that it would have been better if there was proper communication to the public and few structures put in place earlier by the government that would have offer an appropriate safety net to the poor and vulnerable and mitigate the shock from the fuel subsidy removal.
Recall that President Bola Ahmed Tinubu announced the removal of fuel subsidy on 29th May, 2023. The policy which has been a topical issue in the country has produce mixed reactions from people.
