About 12 months after President Buhari came to office, petrol price increased astronomically from N86.50 to N145, an increase of almost 67 per cent.
At that time, crude oil was selling for $45 a barrel, and the landing cost of petrol was around N100 per litre or below, while the parallel market exchange rate stood at N257 to a dollar.
It was a very heavy burden for Nigerians to bear. The Nigerian labour movement and Nigerians in general believed in the nascent Buhari’s administration, and Nigerians were happy that subsidy has finally been removed, and we believed Buhari’s government should do better; he looked genuine.
Sadly, in 2022, the same Buhari’s government came to tell Nigerians they want to remove subsidy again, even when the refineries have not been repaired and naira has crashed from N257 in 2016 to nearly N1000 to a dollar in August 2022 before coming down to N750 per dollar. Official rate might be lower at N430, but the parallel market price also affects the fuel price.
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Even if crude oil price did not increase from $45 per barrel in 2016, the naira devaluation during this period is enough for us to begin another subsidy reimbursement. So this made importation of petrol to be expensive. With crude oil price increase and naira devaluation, the landing price of petrol per litre might be in the region of N300 to N350.
The federal government ought to apologise to Nigerians for mismanaging the economy.
In order to avoid a fight with the Nigeria Labour Congress, government shelved the removal of subsidy in 2022 and budgeted N3.36 trillion for subsidy between January to June 2023 to end Buhari’s administration.
The incoming government led by Bola Tinubu should not accept this. It’s a booby trap. The Buhari government is already negotiating salary increases for workers, hoping it will pass the implementation to its successor.
Tinubu and his team should begin negotiating with Buhari’s government so a supplementary budget is passed for subsidy to continue throughout 2023 while they settle in office.
Tinubu’s government should ensure subsidy continues, but is well managed. N2 trillion is more than enough for subsidy payment per annum.
It could also start planning for the refineries to be fixed.
Government must always have a say in this sector.
David Atta lives in Abuja. Email: [email protected]
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