By Adewale Sanyaolu
Nine months after President Bola Tinubu announced the end of fuel subsidy, Nigerians have called the Federal Government to make good its promise.
It would be recalled that Tinubu had during his inaugural speech announced an end to the fuel subsidy regime which immediately spiked the price of Premium Motor Spirit (PMS), popularly called petrol from N140 per litre to N300 per litre and later to N558 to N700 per litre, depending on the location of the consumer.
Tinubu also assured Nigerians that the removal of subsidy would cut down on the over-reliance on borrowing for public expenditure.
In fact, Tinubu said that he was going to curtail government’s borrowing so as to reduce the debt service burden on the country.
Besides, the president said that subsidy removal would lead to significant savings and resource re-allocation for the country.
“We shall instead re-channel the funds into better investment in public infrastructure, education, healthcare and jobs that will materially improve the lives of millions,” he boasted.
According to FAAC allocation records from the National Bureau of Statistics and Nigeria’s Governors Forum websites, the Federal Government saved approximately N1.45 trillion between June and September 2023 from the removal of petrol subsidy.
But despite the savings from fuel subsidy, Nigerians appear to have slipped further into poverty as most promises by the Federal Government aimed at cushioning the effect of the subsidy removal have not been met.
Some of the other promises aimed at cushioning the effect of fuel subsidy removal was the promise to spend N100 billion to acquire “3,000 units of 20-seater CNG buses to be distributed to transporters across Nigeria at an interest rate not more than nine per cent.”
He equally promised that some of the savings will be used as low-interest loans for businesses, including small, medium and micro enterprises.
However, Sunday Sun findings revealed that transport cost has gone up by over 200 per cent with the buses promised not on ground.
In a recent interview with Daily Sun, the Chairman, Innoson Vehicles Manufacturing Limited, Mr Innocent Chukwuma, said that his company was yet to get orders for the supply of CNG buses either from the federal or state sovernments.
Hear him: ‘‘What I can tell you is that the words we got from governments is that they are still preparing for the take-off of these mass transit buses. Not until they place orders, there is nothing much we can do.
“But as for us at IVM, we are fully prepared for the supply of the vehicles whenever they are ready.’’
Findings by Sunday Sun revealed that the recommendations of the National Economic Council (NEC) which included a proposal for monthly petroleum allowance for civil servants, ranging from N23.5 billion to N45 billion was yet to receive government’s attention.
Indeed,the Federal Government’s Autogas Initiative which plans to convert at least one million vehicles to run on Compressed Natural Gas (CNG) has since hit a brickwall.
Launched in December 2020, the National Autogas Initiative is aimed at reducing the country’s high reliance on petrol and promoting the use of gas as a cleaner fuel for vehicles.
However, 38 months after, the government has failed to meet the target of converting one million vehicles to CNG.
President of the Trade Union Congress (TUC), Festus Osifo, in a recent interview on Arise Television asked the Tinubu administration to come clean on the amount it has saved through the removal of petrol subsidy.
“Since the president made the announcement that N1 trillion was saved from petrol subsidy removal in July, nothing else has been said about the amount that had accrued so far, thereby fuelling speculation that petrol subsidy payment has returned,’’ he reasoned.
Osifo demanded to know where the money saved since the removal of petrol subsidy had gone into.
He explained that since the government announced that N1 trillion had been saved, there was no reason to continue to borrow.
“The President and Commander-in-Chief on his own came and said the country had saved N1 trillion. The Federal Government went everywhere to announce that if subsidy is removed, it’s going to save substantial money.
“We don’t expect them to go everywhere and start borrowing money. They told us they are going to save money. So, where is the money that you have saved and how have they deployed this money?” he queried.
Corroborating the position of Osifo, the Arewa Economic Forum urged President Tinubu to reverse the subsidy removal policy and allocate the extra funds provided by the Federal Allocation Accounts Committee to states for the resumption of the Premium Motor Spirit subsidy.
The forum suggested that the decision should be implemented until the president can ensure the transparency and accountability of state governors to citizens within the limits of his constitutional powers and political influence.
The forum’s Chairman, Ibrahim Dandakata, stated this at a press briefing to propose solutions to issues bedevilling the nation last week in Abuja.
He highlighted the challenging period, saying that the citizens now find it difficult to afford necessities, including food, medications and other essentials caused by hyperinflation, resulting from the removal of fuel subsidy and the sharp depreciation of the naira.
On his part, the Executive Secretary, Major Energy Marketers Association of Nigeria (MEMAN), Mr Clement Isong, recently cautioned the Federal Government against returning Nigeria to another round of fuel subsidy regime.
The association said that the ongoing short-term intervention should be targeted, affordable, well-thought out and time-bound and should not negatively impact the Nigerian economy in the long run.
He said: “The previous subsidy arrangement had adverse effects on the Nigerian economy. That method of subsidy was untargeted, expensive and unsustainable.
“The government has an opportunity now to intervene on a short-term basis to manage escalating energy costs.
“We support these short-term interventions, provided that they are targeted, affordable, well thought out, time-bound and do not negatively impact the Nigerian economy in the long term.”
Isong also stated that the deregulation of the downstream sector of the petroleum industry has attracted investment into the value chain.
He, however, cautioned that the pace of investment would increase substantially if the commodity pricing were right and economical for investors.
“Deregulations are meant to enable people and businesses, therefore, there is need for the right decisions to be made based on the resources available. When the commodity pricing is right this would serve as a confidence booster for the sector.
“If spending goes down, the industry should reduce its costs, people should consider the use of alternative energies available,” he said.
Isong revealed that petrol prices would continue to increase based on market dynamics and the cost of crude oil.
He added that the increase in prices would force petroleum product consumers to be more efficient in their energy usage and choices of fuel type.
He noted that fuel consumers are now transiting from diesel-powered generators and diesel-powered modes of transportation to CNG.
“The rise in diesel costs should help the average consumer move away from diesel-powered generators and diesel-powered modes of transportation rather than subsidy. The rising price is a tough situation, but an inevitable reality.
“The vision of the downstream is to move away from cheap petrol, expensive diesel, and alternative energies, move to mass transit, and be more efficient,” he said.