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  • Opinion - Editorial
  • Updated: June 13, 2023

Subsidy Removal: CUPP's Support For Suffering Nigerians Is Commendable

Subsidy Removal: CUPP's Support For Suffering Nigerians Is C

Impacts of Fuel Subsidy Removal

As the reality of the recent total cessation of petrol subsidy dawns on Nigerians while they continue to groan under the fallouts, the empathy and support displayed by the Coalition of United Political Parties (CUPP) are totally in order. 

According to the analysis carried out by the CUPP, the scarcity of petrol and the attendant price hikes are the consequences of President Bola Tinubu's instant declaration about his administration putting a stop to subsidy payments on petrol during his inauguration speech.

In a statement signed by its National Co-Spokesperson, Mark Adebayo, and issued to newsmen in Abuja last week, the CUPP stated that “hoarding and price hikes are unnecessary, evil, wicked and inhuman. The 2023 budget still takes care of subsidies up till the end of June 2023.”

“This was not only an inauspicious occasion for such an announcement but also a total communication error.

"This is utterly disappointing because one would have expected that the new president would have communication experts working with him on his inaugural speech to avoid such an avoidable gaffe.

“Since the fuel subsidy regime still subsists till the middle of the year, the president should have been silent on it.

"To declare matter-of-fact in such a tactless manner that “subsidy is gone” allows unpatriotic oil marketers to cause the harrowing experiences that Nigerians are going through at the moment. 

"Advising the president, the group stated that he should have known better than making such an announcement over a month before the end of the subsidy period.

“It’s a major strategic communication blunder with undesirable socioeconomic consequences on already overburdened Nigerians.

“He and his handlers should have known well enough that such a declaration would activate a chain reaction of unpleasant sharp practices by oil marketers that would impact negatively on the society and, even, his government.

“Transportation costs have suddenly gone up by 300 percent in some places as the pump prices now range from N550 to N600. 

"This is inexcusable in all ramifications for a government that is just coming in.

"As for the fuel marketers who have taken undue advantage of this policy gaffe, it is an unethical and obscene business practice to unleash such sudden attacks on Nigerians when you still have subsidy support till the end of June 2023.

"Your action is inexcusable, reprehensible, unpatriotic, and obnoxious.”

Counting the Losses of Subsidy Removal - a Comprehensive Review of the Costs and Consequences of the Recent Subsidy Removal 

The recent subsidy removal by the Nigerian government has had significant costs and consequences on both the economy and Nigerians.

Here is a comprehensive review of the impacts:

  • Increased Fuel Prices: With the subsidy removal, fuel prices have skyrocketed, leading to a significant increase in transportation costs. This has resulted in higher prices for goods and services across various sectors of the economy, affecting the purchasing power of Nigerians.
  • Inflationary Pressure: The removal of subsidies has contributed to inflationary pressures in the economy. Higher fuel prices have a ripple effect on other sectors, driving up production and distribution costs. This ultimately leads to an increase in the general price level, eroding the value of the Nigerian currency and reducing consumers' purchasing power.
  • Economic Burden on Nigerians: The removal of subsidies places a direct burden on Nigerians, particularly the low and middle-income earners who heavily rely on affordable fuel for transportation and electricity. The increased costs of transportation and energy impact their daily lives, making it more difficult to meet basic needs and exacerbating poverty levels.
  • Business and Investment Climate: The removal of subsidies creates uncertainty and volatility in the business and investment climate. Fluctuating fuel prices and higher production costs can deter both local and foreign investments. Businesses may struggle to remain profitable, leading to downsizing, job losses, and a slowdown in economic growth.
  • Social Unrest: The removal of subsidies often sparks social unrest and protests from the masses. Nigerians, already burdened by economic challenges, see the removal as an additional hardship imposed by the government. This can lead to public demonstrations, strikes, and disruptions in social stability, impacting productivity and economic activities.
  • Government Expenditure Reallocation: The removal of subsidies frees up government funds previously allocated to fuel subsidies. These funds can be redirected towards other sectors such as education, healthcare, and infrastructure development. However, proper utilization and accountability of these funds are crucial to ensure they are effectively deployed for the benefit of Nigerians.
  • Long-term Economic Reforms: While subsidy removal presents short-term challenges, it is also seen as a step towards long-term economic reforms. It encourages fiscal discipline, reduces the burden on government finances, and promotes the development of alternative energy sources. However, the success of these reforms depends on effective implementation and the provision of social safety nets to mitigate the immediate impacts on vulnerable populations.

Conclusion

The removal of subsidies by the Nigerian government has resulted in increased fuel prices, inflationary pressures, economic burdens on Nigerians, and social unrest.

While it aims to drive economic reforms and reallocate government expenditure, the short-term consequences highlight the need for proper planning, effective implementation, and measures to mitigate the impact on the most vulnerable segments of society.

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