MANAGEMENT OF REMOVED PETROL SUBSIDY

The petrol subsidy removal has continued to dominate the ongoing discourse on the state of the economy.

The removal of the stimulus has been blamed for the record inflation because of its multiplier effects on all aspects of the Nigerian economy.

Crude oil is a lifeline for the Nigerian economy. It generates most of Nigeria’s foreign exchange and powers standby electricity generators in households, factories, offices, and other public places.

Also, some power plants use crude oil fuel to generate electricity.

Before the removal of the subsidy, almost all the foreign exchange from the declining export of Nigerian crude was being used to export petrol.

This is so because of the collapse of Nigeria’s four refineries, which stopped producing petroleum products, the growing local demand for petrol, and the increasing smuggling of the products to many African countries.

The implication is that crude oil, which used to generate more than 80 percent of Nigeria’s foreign exchange since February 2022, has stopped contributing to the external reserve.

The proponents of subsidy removal, including the World Bank and IMF, local economists, and the federal government, had argued that the subsidy removed from the pump price of gasoline would be diverted to critical sectors of the economy.

According to the argument, the removed surplus would be pumped into the education, health, and security sectors, with improved salary structures, the provision of adequate manpower, and infrastructure.

Eight months after the Tinubu administration removed the subsidy, most critical sectors have yet to get the promised lifeline.

Today, the ‘Citizens Forum’ would raise questions on the whereabouts of the subsidy removed from petrol.