For years, the petrol subsidy has been seen as a drain on Nigeria’s lean resources and an albatross to its economic growth. This has led to strident calls for its complete removal. For years, the argument for and against the removal of subsidies has mostly been shaped by the socio-economic reality and political leaning of those advancing the argument. In the build-up to the 2023 presidential election, the question of whether subsidy on petrol should be scrapped or not.
On May 29 2023, President Bola Tinubu, during his swearing-in, announced the removal of subsidy on petrol and the exchange rate. The two subsidy schemes have long been considered a drain on the nation’s lean resources, and their removal, some experts say, will free up funds to be spent on other critical areas of the economy and, in turn, herald a new era of economic prosperity. But that is not to be. What happened instead is galloping inflation and an unprecedented cost-of-living crisis.
In the months that followed the removal of these subsidies, prices of basic goods and staple household commodities went up by more than 200% or even higher in some cases. Since the removal of the subsidy on petrol was done haphazardly and without prior arrangement and measures to mitigate its impact, Nigerians were left in a lurch to find a way to survive the harsh and precarious reality. The government claimed the removal of the two subsidies without any plan to cushion its debilitating effect on the people was a necessary evil, and the people must endure the momentary suffering and hardship for future prosperity.
While there was a consensus of some sort among the leading presidential candidates in 2023 that the nation must do away with the petrol subsidy, that is not the case ahead of the 2027 general elections. The presidential candidate of the African Democratic Congress (ADC), Atiku Abubakar, who unequivocally supported the removal of subsidy in 2023, has now said he would reinstate it if elected president next year. Atiku’s volte face on subsidy came as a surprise to many, as he is not particularly known to be a socialist or populist politician; for much of his life, he has been known to be a staunch and incorrigible proponent of privatisation, market economy and laissez-faire approach to governance.
Since he first disclosed his intention to remove the petrol subsidy, Atiku has doubled down on the pledge. He noted that the total removal of subsidy has decimated the purchasing power and savings of Nigerians and impoverished them. He stated that reintroduction of subsidy does not exactly mean a return to the old subsidy regime that was riddled with mismanagement and corruption but targeted subsidy to cushion the impact of high living costs, adding that Nigeria is rich enough to subsidise petrol for its people.
Expectedly, Atiku’s promise to reinstate petrol subsidy has sparked intense debate among Nigerians. While Atiku has the ears of many Nigerians who have been on the receiving end of the crushing and devastating impacts of the removal of petrol subsidy and support his plan to reintroduce the programme, the ruling party, the presidency and the federal government have had nothing but utter castigation and excoriation for him and his plan. They warned that Atiku is merely playing on the intelligence of Nigerians and that his promise to return petrol subsidy is rooted in politics of desperation and not genuine interests in the welfare of Nigerians and the stability of the country.
Amid the hysteria and furore that petrol subsidy has elicited, one thing that cannot be denied is that Atiku’s promise to reinstate the programme has deeply rattled the government of the day as the issue has become a topical public discourse that could largely influence the voting choice of the people, swing political momentum in favour of Atiku and affect the outcome of the presidential election. Seeing that the debate on petrol subsidy is playing a role in voters’ decisions ahead of next year’s general election, the federal government quickly moved in to seize the initiative.
The truth is that it will be hard for the government to dissuade people from embracing Atiku’s message and convince them that the removal of the petrol subsidy was a prudent and logical decision if such a decision has brought nothing but hardship, pain and anguish to them. Nigerians who can no longer afford to eat a decent meal, pay for rent, transport and other important utilities will not give a hoot about your economic and fiscal rationalisation of petrol subsidy abolition, and they run to the warm embrace of anyone who promised to reinstate the policy. The flamboyant and colourful lifestyle of many governors, public officials and members of the ruling party, which reeks of insensitivity, has not exactly helped the case and argument of those in support of petrol subsidy removal.
Realising that it won’t be enough to demonise and vilify Atiku over his promise to return petrol subsidy because his message resonated with Nigerians who are bearing the brutal consequences of abolishing the policy as they have been immiserated by the move and care little for the government tired troupes about why subsidy is bad for the country, the ruling party and the federal government have decided to introduce measures to cushion the effect of subsidy removal on Nigerians. Last week, President Bola disclosed that the federal government and the governors have moved to cut the prices of transport fares across the country, which ballooned after the removal of subsidy
“I am pleased with my discussion with the Governors’ Forum this afternoon. The Governors have, on their own initiative, resolved to take immediate measures to bring down the cost of transportation in their states, with a strong focus on leveraging the cost benefits of CNG and electric vehicles. The Federal Government is already investing significantly in this energy transition. Through the Presidential CNG Initiative, over 120,000 vehicles have been converted nationwide, with more than 100,000 additional conversion kits in the works. At the same time, we continue to expand conversion centres and refuelling infrastructure nationwide,” the president said in a statement by his media aide last week.
The announcement has not done much to quell the feeling of distrust and misgivings among Nigerians over the petrol subsidy issue, with many Nigerians seeing the cheaper transport initiative has nothing more than a response and counterbalance to Atiku’s about-turn on petrol subsidy; a move to stem the wave and traction the former vice president message is getting among disenchanted and much-tried Nigerians as the nation heads to the polls next.
The cheap transport initiative has drawn more scrutiny and raised more questions than applause. For many Nigerians, it is hard to argue that the motive and intentions of the president and governors who introduced the initiative are not questionable and whether they have the genuine interest of the people at heart. Subsidy on petrol was scrapped over three years ago, and save for a raft of haphazard, poorly thought-out and somewhat perfunctory measures purportedly aimed ataméliorating the suffering of many Nigerians, which did not have any real and material impact on the people and the nation, the government has done nothing to cushion the brutal and chaotic impact of petrol subsidy removal on the people.
Introducing a supposed cheap transport initiative three years after ending the petrol subsidy that kept inflation at bay, brought reprieve, socio-economic comfort and financial freedom to the people cannot be deemed an altruistic move. If the government genuinely cared about what the neoliberal economic policy it introduced would do to people, it would have introduced the cheap transport scheme at least two years ago. Promulgating it four months before the general election smacks of a desperate attempt by the government to get back in the good graces of the people who have become disillusioned with it and provide an alternative electioneering gospel to the one being preached by a leading presidential candidate and which the people are paying attention to and willing to act on.
