National economies grow with the commitment, sacrifice and proper sharing of the benefits of contributions and innovations by all members of society.
The removal of fuel subsidy presents an opportunity for the negotiation of a new social compact founded on the principles of the democratisation of sacrifices to be made for the resuscitation of the national economy. It is also an opportunity to negotiate how the savings will benefit all members of the Nigerian society; not a select few in the corridors of power and their cronies. This discourse reflects on the opportunities and how this can facilitate the growth of the economy.
Beyond politics, it is imperative to state that there appears to be a national consensus that fuel subsidy must go. The three frontline political parties in the last general elections notably the All Progressives Congress, Peoples Democratic Party and the Labour Party all campaigned for the removal of the subsidy. This is hinged on the reality that beyond ideological positions, the Federal Government commits not less than 94 per cent of all its earnings to debt service.
The Nigerian fiscal situation is so bad that the N3.65tn on savings from the removal of fuel subsidy cannot even plug the deficit of over N10tn in the 2023 federal budget. So, there is already a crater yawning to swallow whatever sum that will be saved. In this kind of scenario, the leadership of a highly indebted nation, which if it were an ordinary company would have been declared bankrupt, cannot proceed to implement decisions on the basis of some supposed superior knowledge.
However, there are process and strategy issues involved in the removal. The removal will cause hardship and erosion of the purchasing power of the average Nigerian in a country where the majority have been affirmed to be multidimensionally poor. From the new petrol prices announced without consultation, it is clear that the minimum wage of N30, 000 cannot fill up the tank of most cars on Nigerian roads.
The engagement would have provided clarity and transparency in the computation of the new fuel prices. This will involve information available in the public domain on a comprehensive breakdown of the cost components and the basis for the calculation of the new fuel price. The defunct Petroleum Products Pricing Regulatory Agency used to have a pricing template available to all Nigerians.
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