Former President Olusegun Obasanjo has told Financial Times that fuel subsidy has returned to Nigeria because of the present ‘hyper’ inflation in the country.
The former leader who berated President Bola Tinubu for the manner and way he announced the removal of subsidy stated that removing the controversial subsidy wasn’t something one can “wake up one morning and say you removed the subsidy.”
Recalled that Tinubu in his inaugural speech on May 29, 2023 announced that fuel “subsidy is gone”, which threw the country into inflationary chaos because of the way he implemented the removal of the corrupt-laden subsidy regime.
The infamous pronouncement led to increased the price of a litre of Petroleum Motor Spirit popularly called petrol more than three fold. It also caused a domino effect on the prices of goods and services, especially consumable across the country.
But barely a year into the new administration, findings show that the Tinubu-led government is paying and spending more on subsidy than his predecessor Muhammadu Buhari.
For instance, Nigeria is expected to spend over N5.4 Trillion on fuel subsidies in 2024, according to a draft copy of the Accelerated Stabilisation and Advancement Plan (ASAP) submitted to the presidency by the Minister of Finance and Coordinating Minister of the Economy Wale Edun.
The analysis of the draft shows that Tinubu is expected to spend N1.8 Trillion more than in the 2023 and more than twice as it was under the former President Buhari in 2022.
Edun had also been extremely careful in his choice of words when asked about payment of subsidy when he appeared on a TV programme on Channels sometimes ago.
In another report in July this year, the Major Energies Marketers Association of Nigeria (MEMAN) revealed that the landing cost of petrol was N1,117/litre (as of Tuesday, July 16, 2024) while a litre of the product is sold between N617 to N700 across Nigeria.
The revelation showed that landing cost of petrol is far above the pump price of the product across Nigeria. It also means that the government is paying more than N300 on a litre of petrol consumed daily by Nigerians.
Although, the sole importer of the PMS, National Petroleum Company Limited (NNPCLimited) has consistently denied paying subsidiaries on imported fuel while the government also remained silent on the landing cost of PMS.
The opaque state oil company (NNPC) has also been accused of intentionally inflating the number of fuel consumed by Nigerians so as to collect money for what they didn’t deliver.
In September 2022, for instance, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) disclosed that Nigeria’s average daily petrol consumption was 66.8 million litres. NMDPRA also claimed that 52 million of litres were consumed by Nigerians in June 2023.
Obasanjo stated that Tinubu should have taken efforts to tranform the oil-dependent Nigeria from “transactional economy to transformational economy,” saying:
“Because of inflation, the subsidy that we have removed is not gone. It has come back.”
He said the announcement had pushed millions of Nigeria into extreme poverty, which has also caused hardship on the them with a snail-pace measures by the government to ameliorate their suffering.
Speaking on the rate of unemployment among the Nigerian youths, the former military and civilian president said the youths are restive “because they have no skill. They have no empowerment. They have no employment.
He warned that Nigeria is “sitting on a keg of gunpowder. And my prayer is that we will do the right thing before it’s too late.”
