Tony Chukwunyem Analysts at CSL Research have said that the $800 mil- lion World Bank loan, which the Federal Government said it had secured to help cushion the impact of the planned removal of the subsidy on petroleum products on Nigerians, is inadequate. In a note released yesterday, the analysts pointed out that $800 million for 50 million Nigerians at the Investor and Exporters’(I&E) forex window rate of c. N463/1$ comes to only N7,408 per individual, which, according to them, “will most certainly not provide the needed cush- ion by the time the effect of the removal reflects on the overall consumer wallet.”
The analysts further pointed out that “the Nigerian government has a long-standing history of poor implementation of crucial policies and projects that have to do with the masses – recalling 2020 lockdown palliative materials, most of which was hidden away and re- branded for election campaign.
Also, corruption and paucity of data will most likely lead to exclusion of eligible people and inclusion of non-eligible people in the register.”
However, the analysts stressed that although they realise how politically difficult the decision to scrap the fuel subsidy regime is for any administration, they, “see no option for the incoming government amidst a tight fiscal space.”
They said: “Nigeria is the only OPEC+ member without a working refinery, importing c.95 per cent of refined petroleum products to meet its domestic consumption compared to other member countries with less than 20 per cent dependency.
The Federal Government has announced the removal of fuel subsidies in 2023 and has urged Nigerians to prepare for higher fuel prices that will follow. “Though we realise how politically sensitive this discourse is, we see no option for the incoming government amidst a tight fiscal space. Undoubtedly, an attempt to revise the price to suit current realities will be strongly resisted by the populace, who have been hard hit by two recessions and a pandemic in the last seven years amid rising food and utility costs, making us believe the elimination of the subsidies will be gradual.”
They pointed out that though subsidies still exist and the pump price of petrol remains fixed, the persistent scarcity of the product had led to arbitrary increase in price above the government’s approved price of N185 per litre.
