Editorial

Again, The Subsidy Debate

THE Group Managing Director of the Nigerian National Petroleum Company Limited, Mele Kyari, penultimate Tuesday, announced that the Federal Government will in 2022 remove petrol subsidy, thus paving the way for petrol to sell at between N320 and N340 per litre

AS would be expected, this has generated much controversy across the country.

IN its reaction, the Petroleum and Natural Gas Senior Staff Association (PENGASSAN), through its Secretary, Lumumba Okugbawa said oil workers would resist the implementation of that decision. The union argued that the country’s refineries must work before subsidy would be removed.

ON its part, the Senior Staff Association of Statutory Corporations and Government Owned Companies (SSASCGC) vowed to resist the removal of petrol subsidy unless government increases the minimum wage by 300 percent (to N200,000.00).

THE Association of Senior Civil Servants of Nigeria, and several other groups, also opposed the planned removal of petrol subsidy.

IN support of government’s move is the Independent Petroleum Marketers Association of Nigeria (IPMAN). The president of the Association, Chinedu Okoronkwo, explained that the Petroleum Industry Act (PIA), signed on August 16, 2021 has no provision for subsidy. He stated that marketers have always advised government to remove subsidy because it was not in the interest of the development of the downstream sector of the oil industry. He therefore, expressed the hope that the decision to stop subsidising petrol in 2022 will attract more investments to the sector.

ON whichever side of the divide one wishes to position his argument as to whether subsidy should stay or be removed, one issue remains constant in the last three decades of the debate. And the issue has been the increase in the cost of goods and services whenever subsidy on petroleum products is removed.

THE twin question that naturally arises from this subsidy dilemma is: when best and how best should subsidy be removed without grievously hurting the masses who suffer more from inflationary trends?

PERHAPS it is part of an answer to the above poser that the Federal Government recently announced that it would pay N5,000 palliative per month to some 40 million poor Nigerians over a 12 month period when the subsidy on petrol will have been removed in 2022.

THAT, no doubt is a good move. But then, what is the fate of the unknown poor persons who are not on the National Social Register that would be used for the disbursement of the funds?

THE Voice therefore, calls on the Federal Government to evolve additional measures that would better cushion the effect of the subsidy removal in the long run.

 

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular

To Top