The conversation
surrounding fuel subsidy in Nigeria has been a bone of contention to say the
least
While the
general public have naturally geared towards the idea of retaining fuel
subsidy, the Nigerian government is of a different opinion.
For years now,
different administrations have floated the idea of removing the fuel subsidy
entirely, with one instance leading to a full on national protest.
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The government’s
insistence on this notion stems from the fact that the inclusion of fuel subsidy
in its expenses incurs more needless spending on the part of the government.
However, should
such an idea be fully implemented, it would come at the cost of the public’s
convenience, and given the economic climate of the country, coming at the cost of
the public’s convenience is a gross understatement.
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Fuel hikes as
little as 50% in the past has driven up standard of living significantly,
particularly in cities that are very mobile and or impoverished, and
considering that the nation relies heavily on fuel consumption for both
transportation and power supply, a complete removal of fuel subsidy would place
a heavy financial burden on the majority of the people residing in the country.
So, it comes as
no surprise that Nigerians are heavily opposed to the idea of removing the fuel
subsidy as a whole. Until the nation is able to refine its own oil, effectively
slashing down the cost of fuel by a substantial margin, fuel subsidy would
remain something the people would want commissioned.
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Regardless, the
last quarter of 2022 saw some of the nation’s worst fuel hikes across numerous
states.
According to Nairametrics,
a news source for economic headlines, some regions in Nigeria saw as much as a
100% increase in fuel prices. “Fuel now sells for N450 per liter in Uyo, Akwa
Ibom state, N300 per liter in Benin, Edo state, N350 per liter in Calabar,
Cross River state, and as high as N500 per liter in Port Harcourt, Rivers
state,” an extract from the report details.
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These hikes are
concerning, considering that the current cost of fuel per litre should be N180,
a price that is in itself already considered too high.
A couple of
sources revealed that the increment has been alarming as prices in regions like
Port Harcourt have sold for as high as N700/litre on the black market.
While the
government has touted the removal of fuel subsidy as soon as June 2023, the
increase in fuel prices suggests that that subsidy has already been removed.
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Experts on the
matter, have proposed that the removal be gradual, giving Nigerians time to
acclimate to the incremental increase in cost.
Some experts
have even suggested that the current increase in price should serve as a
prelude to what is about to come, as there is no way to determine how high the cost
of fuel would rise should the subsidy be officially removed. Fuel could go up
as high as N500, N700, or even N1000 per litre.
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There is also
the fact that external events outside of the country could catalyse said
increase as Nigeria currently lacks the capacity to refine its own oil. As a
result, it is very likely that events like the ongoing Russia/Ukraine war could
affect how high fuel prices soar in Nigeria.
Regardless of
this scare, the Nigerian National Petroleum Corporation (NNPC) assured Nigerians
that should fuel subsidies be removed, the price of fuel would not go higher
than N462 per litre.
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