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Federal Govt still subsidizes petrol

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By Abraham Adekunle

Complete subsidy removal would burden Nigerians, says Isa Yuguda.

In a recent interview on Channels Television’s Politics Today, former Bauchi State Governor, Isa Yuguda, provided insights into the ongoing petrol subsidy removal policy under the administration of President Bola Tinubu. Yuguda’s remarks shed light on the complexities surrounding the subsidy issue and its implications for Nigerians. Yuguda emphasized that while the Federal Government still pays a minimal subsidy on petrol, completely removing it would bring significant hardship to Nigerians. He delved into the intricacies of the subsidy regime, explaining its historical context and the challenges associated with its removal.

Also, the former governor clarified that the removal of the subsidy was not a recent decision but rather a consequence of the 2023 budget prepared by the National Assembly. He pointed out that the budget didn’t include provisions for post-May 29, 2023, anticipating the absence of a subsidy provision beyond that date. Thus, Tinubu’s announcement was more of a formality rather than a new policy directive. Regarding ongoing subsidies, Yuguda confirmed that Nigeria still pays between 300 to 400 billion naira monthly, acknowledging the International Monetary Fund’s (IMF) observation. However, he emphasized that the removed subsidy was misappropriated funds that didn’t benefit the public but enriched private individuals. These funds now contribute to government revenues, reflected in increased federal and state budgets.

Defence for subsidy removal and governance collaboration.

Yuguda detailed various instances of subsidy misuse, such as demurrage costs incurred due to delayed fuel offloading, fuel losses during transportation, and diversion of fuel meant for domestic consumption to neighbouring countries. He stressed that the subsidy removal redirected these funds to the national treasury, benefiting both federal and state governments. On the necessity of subsidies, Yuguda argued for their continuation, citing potential increased hardships if removed entirely. He acknowledged the public’s concerns over rising commodity prices but emphasized the need for state governments to utilize their increased revenues to counterbalance such effects.

Addressing criticisms of the subsidy removal, Yuguda attributed some price hikes to psychological reactions rather than natural economic consequences. He dismissed claims of sabotage, suggesting that increased state revenues could alleviate the economic pressures faced by citizens. Yuguda urged state governments to prioritize citizens’ welfare by investing in essential services and implementing measures to mitigate rising living costs. He emphasized the collective responsibility of both federal and state governments in addressing economic challenges and ensuring citizens’ well-being. Yuguda underscored the importance of effective governance at both federal and state levels in mitigating the adverse effects of subsidy removal and addressing the socioeconomic needs of Nigerians. He called for the collaboration between federal and state governments to alleviate citizens’ hardships and foster economic stability and prosperity.

Subsidy removal sparks debate in Nigeria, Yuguda offers insights.

Of course, the subsidy removal issue has sparked debates and discussions across Nigeria, with various stakeholders expressing divergent views on its implications. While some argue for the necessity of subsidy removal to streamline government spending and promote fiscal responsibility, others highlight the potential negative consequences for ordinary citizens, particularly those already grappling with economic challenges. Nigeria’s economy has long been dependent on oil revenue, with fluctuations in global oil prices directly impacting domestic policies and government spending. The issue of petrol subsidy removal has been a recurring theme in Nigerian politics, with successive administrations grappling with the complexities of subsidy management and the need to balance fiscal prudence with social welfare considerations.

The recent subsidy removal announcement by the Tinubu administration has reignited discussions on the efficacy of such policies and their impact on the average Nigerian. While proponents argue that subsidy removal is a necessary step towards economic reform and sustainability, critics raise concerns about the immediate hardships it may impose on vulnerable segments of the population. In light of these debates, Yuguda’s insights provide valuable perspectives on the subsidy issue, highlighting the challenges inherent in subsidy management and the complexities of implementing policy reforms in a diverse and dynamic socioeconomic landscape like Nigeria’s.

Related Article: Fuel subsidy to fund vital Nigerian projects

Moving forward, it is essential for policymakers to carefully consider the implications of subsidy removal and to implement measures that mitigate the potential adverse effects on vulnerable populations. This includes targeted social welfare programs, investment in critical infrastructure, and measures to promote inclusive economic growth and development. Ultimately, achieving a sustainable and equitable economic model in Nigeria will require concerted efforts from both government and civil society stakeholders. By fostering dialogue, promoting transparency, and prioritizing the well-being of all Nigerians, policymakers can navigate the challenges of subsidy removal and chart a path towards a more prosperous and resilient future for the country.

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