Fuel subsidy removal cuts national consumption by ending smuggling
By Jeph Ajobaju, Chief Copy Editor
Fuel subsidy removal has reduced consumption across the country from 66 million to 40 million litres per day as smugglers have stopped or slashed their trade to neighbouring countries where petrol from Nigeria now sells at market prices.
Benin Republic, one of the havens for smuggled fuel, has raised pump price to CFA 800 per litre, adjusting to the reality of higher prices in Nigeria where market forces have nixed cheap petrol.
Reduction in Nigeria’s consumption was disclosed by Abia Governor Alex Otti after the inauguration of the National Economic Council (NEC) in Abuja, chaired by Vice President Kashim Shettima.
Earlier, President Bola Tinubu told the NEC he would accept collaboration in governance to address the economy and improve the welfare of citizens because there cannot be any excuse for failure.
Committee to work out palliatives
Bauchi Governor Bala Mohammed recounted the NEC deliberated on subsidy removal, the challenges and problems, and set up a small committee to review and devise a term of reference that will provide palliatives for workers and other vulnerable groups.
According to him, the committee comprises Governors of Kebbi (Chairman), Anambra representing the South East, Benue (North Central), Kaduna (North West), Bauchi (North East), Cross River (South South), and Oyo (South West).
“As part of the inaugural national economic council meeting today, the major focus was on the removal of petroleum subsidy and implied the removal of subsidy on foreign exchange, which has led to some convergence of some sort,” Otti explained.
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Implications of subsidy removal
“The impact of these two actions definitely is increased prices. And as a way to solve the problem and reduce the shock, a presentation was made by the National Automotive Design and Development Council on the great things that are happening in the automotive industry,” Otti said, per Vanguard.
“It was [reiterated] that about six states in the country, including Lagos, Ogun, Anambra, Enugu, Akwa Ibom, Kaduna and Kano have benefited from domestic production of vehicles or assembling of vehicles by Nigerian companies operating in Nigeria.
“These companies include INNOSON, Maikano, Dangote Peugeot, Peugeot Automobile of Nigeria, Stallion Hyundai, Honda, Elizade/Toyota, Coscharis and Ford, Kojo Motors, Jet Systems motors.”
Otti said the Tinubu administration should be commended for its efforts to remove subsidy and still help create palliatives, stressing the consumption of fuel in the country has reduced.
“We must salute the courage of the current government to bite the bullet and remove it. Initially, it has reduced the consumption from about 66, 67 million litres a day to just about 40 million. And as time goes on, the consumption will continue to go down.
“We know there are implications, particularly for the poorest of the poor. And that is why this government is seriously looking at palliatives to at least deal with the shock that the poor of our society go through.”
