I wish to call on the incoming administration of General Muhammadu Buhari and the incoming 8th National Assembly of the Federal Republic of Nigeria to REMOVE FUEL SUBSIDY.

This step has become very important due to the following negative effects is is having on the nation Nigeria:

It is taking our work abroad
It is preventing our refineries from working
It is enriching the rich
It is eating up our tomorrow
It is preventing Nigeria from growing
It is promoting corruption
It is causing Nigerians pain
It is wrongly applied. Production should be subsidized and not consumption.
It is holding Nigerians and Nigerian Government to ransom
It is not sustainable

It is taking our jobs abroad: One of the evils of subsidy is that it is promoting unemployment in Nigeria. Fuel subsidy encourages our crude oil to be exported abroad, refined abroad and be transported back (most of the time not by Nigerian owned vessels) to Nigerian; as if all the above is not enough, the guy who brought the oil back (who is possibly the exporter and refiner) is paid subsidy (to say thank you for making so much money from our oil?), and thereby encouraged to ensure this trade continues for life!

With subsidy regime, the oil marketers have more than interest in ensuring that the trade continues. In other words, they have reasons to ensure that our refineries never work; and by implication, all the jobs that our refineries can bring to Nigerians are exported abroad only to pay subsidy for bringing the oil back without our jobs! Our jobs are exported abroad to develop other nations while we are dying of unemployment.

It creates a reason for our refineries to be sabotaged: A marketer can pay as much millions as needed to sabotage (blow off, vandalize, shutdown) a working refinery to ensure that payment of subsidy to his bank account continues.

It take a little amount of money to bribe security officers to leave (excuse themselves) from a strategic pipeline so it can be vandalized and ensure that crude oil is stolen or does not reach the refineries? You will agree therefore that, there is no need to repair refineries as long as someone still has the stake (subsidy) to sabotage and vandalize. Removing the stake will reduce the desire to vandalize and grand our refineries when they are eventually back.

 It is wrongly applied, unsustainable and eating up our future:

Fuel is a consumable product, one that is consumed every day and by millions of people. Even if the subsidy amount is N5 per litter and 20 million liters is consumed per day, that will be N100 million every day that breaks in Nigeria. One wonders how sustainable that will be.

This amount can be use in Cocoa production and processing, Cassava production and processing, Rubber production and processing etc.

The point is that subsidizing production has far more reaching effects and makes more economic and development sense than subsidizing consumption. Subsidizing production will have chain of positive effects while that of consumption ends with 1 consumer.

It is enriching the privileged few rich: Who is actually benefiting the most from subsidy? How many cars does a common man has to fuel? How many houses does a common man has to power with generators? How much of fuel does a common man actually consume per day compare to the “big guys”?

 From the subsidy, many in position of power are highly enriched while the rest of Nigerians are highly impoverished. The longer this goes on the wider the gap between the rich few and the poor masses.

We have seen at various times how subsidy issues have shaken us and our government. The beneficiaries have made efforts to make us belief it is in our interest but they lied. It is a way to hold us down, ensure that our refineries are not working and no job created thereby. It is a disguised way to enrich the privileged few and impoverished Nigerians. It is a way to hide away corruption and embezzlement of our money from the public view.

They made us feel that we cannot survive without the subsidy; that the price will go up and that we will not be able to avoid it, but they lied. The law of demand and supply will apply just like in telecommunication – more marketers will come with competitive price until we hit the lowest of the low in matter of 3 to 4 years. And once we start refining locally, the market will be saturated so much so that filling stations will be advertising and begging us to buy – like MTN, GLO and the rest are doing today.

There is no denying the immediate effect on our pocket today, but the gain will eventually overtake the pains.

It is obvious that FUEL SUBSIDY in Nigeria is more negative in effect than it is positive.

 While subsidy is neither bad nor good, it can be badly applied as in the case of FUEL SUBSIDY in Nigeria due to the aforementioned reasons.

Removing subsidy will relief the pressure on the government to pay huge amount every month. It will free resources that can be used to subsidize/develop production sector, build refineries which will create employments.

For these and more reasons that are not mentioned, I am calling on General Muhammadu Buhari and the incoming 8th National Assembly to make the biggest change in our struggle for a better tomorrow. As a matter of urgency, remove FUEL SUBSIDY and embark on building of our refineries immediately. Put a life sentence penalty on saboteurs of refineries and any act of oil theft.

To read a more comprehensive version please go to: Remove Subsidy blogpost