However disappointing or delightful, it is almost certain that the Nigerian Government is not going back on the subsidy removal policy unlike during the former president Goodluck Jonathan administration when its proposal was immediately withdrawn after series of nationwide economic strike and labour shutdown. The former government owned company__ Nigerian National Petroleum Corporation (NNPC), known for its consistent lack of profit and poor administration since its establishment in 1977 had for the first time announced a profit of N287 Billion in 2020 and got privatized in July 19 2022 almost a year after the Petroleum Industry Act thereby becoming the Nigerian National Petroleum Company Limited which will now operate as a commercial oil company with over 200 million shareholders with integrity and excellence.
The NNPC which had already been fully incorporated in September 2021 weeks after the Petroleum Industry Act PIA was signed into law by former President Buhari is now a fully commercialized company with the Ministers of Finance and Petroleum Affairs its major shareholders following the clause in the PIA legalizing the sales and transfer of its shares.
From the legal changes to the declarations in the 2022/2023 general elections, it is of no news that the just concluded 2023 elections witnessed an equal fervour with the top three presidential candidates’ manifestoes highlighting the removal of subsidy which had further sparked the intentional gravity of the notion on the supposed inattentive citizens.
The ice was finally broken on May 29 2023 when Bola Tinubu, the elected presidential candidate confirmed at his inauguration that “fuel subsidy is gone” which advertently and immediately sprout up diverse opinions and concerns making people finally give long thoughts on the future directions of the country coupled with individual survival measures especially as the government reportedly only “looks up to Nigerians to bear the hardship for a while promising to channel the resources saved from the policy to developmental programmes”, but the government has however gone mum on what its officials would sacrifice.
This has in return sprung up concerns and worries on the proposed promising effects that the policy is rolled out to play which are ranging from the immediate increment in per litre pump price to abnormal scarcity of petrol and hoarding of available products. These sudden increments in pump price would not only affect Nigeria but major countries buying from the country.
The subsidy which has been in place since the establishment of the NNPC in 1977 and been adequately monitored had all an time staggering increase in 2015 with a budgeted figure more than N316 billion and a total from 2015-2020 amounting to N1, 990.6 trillion making the figures from each year in billions of naira respectively. By 2021, the narrative had changed and budgeted values shot drastically to trillions of naira accounting for about N1.42 trillion and N4,3 trillion in 2021 and 2022 respectively. According to a recent Premium Times report, the federal government had appropriated N3,6 trillion for petrol subsidy for six months ending June 2023 which is roughly about N560 billion every month, a figure more than the values incurred in a particular year before 2021.
Undoubtedly, the nation has had its share of long and turbulent waves in its oil industries over the years as it is one of the top five oil exporting and producing countries in the world. Due to the many uses petrol has, Nigeria for one has witnessed a dramatic evolution of its oil prices over the years, from the early 19’s under General Yakubu Gowon 1966 administration to Senior Brigadier Babangida 1985-1993 administration, the country enjoyed a nationwide petrol price per litre of Nigerian Kobo of 6k to 60k. Naira payment for petrol therefore started at 5/litre in 1993 during Shonekan administration up till President Buhari in May 31 2023 where it was 185/litre.
Now, on May 31 2023, the NNPLC, following the removal of the subsidy announced the new pump prices of petrol nationwide which has significantly witnessed an ever surprising increase of 200% and above from its previous price of 185 naira/litre till May. The county which had for over 50 fifty years regulated an equal pump price nationwide now hasLagos state topping the list with the lowest price per litre of petrol at 488 followed by the Southern Western parts with 500/litre and the Northern parts having prices at above 500/litre recording a staggering increment of more than 200% since the former President Buhari administration price of 185 naira/litre.
As the Government now implores all stakeholders to bear this time changing hardship and promises to present a better transformed oil industry in the country, all hopes are for the respective stakeholders to crucially collaborate and ensure that the benefits of subsidy removal are shared equitably, ultimately steering Nigeria towards a greener, more inclusive, and economically vibrant future. As the country embraces this challenging decision, it embarks on a path towards long term economic sustainability and growth.
And while the transition may bring short term uncertainties and adjustments, it presents an opportunity to reallocate resources and invest in alternative energy sources, hopefully fostering innovation and progress. By implementing transparent policies, promoting efficient public transportation systems and prioritizing social welfare programs, Nigeria can mitigate the impact on vulnerable communities and pave the way for a more resilient and prosperous future.