Wednesday, November 9, 2011

My take on the proposed fuel subsidy removal

I wrote this article days ago but couldn't post here for some reasons. Enjoy
It is no more news the president Jonathan and his crew are bent on removing oil subsidy, the last thing the masses enjoy from government. Nigerians have reacted and majority have spoken against the planned action but the government seems hell bent on going ahead with the removal. Below is a quote from a Nigerian interviewed by a national daily:

“Removing oil subsidy will make poor people poorer and make life more difficult for Nigerians because the entire economy of this country, not just its revenue is hinged on the pump price of fuel. The cost of doing business will increase by more than 200%  since subsidy will result in over 200% increase of the pump price of petrol. So imagine the effect of that on small business, its catastrophic.

Now my argument of the federal government that subsidy will bring in competition that will send prices crashing as soon as the private sector keys in to take advantage of the abounding opportunities that the removal will bring. Sincerely that’s a good and logical argument. But Nigerians will love to know why the price of diesel that has long been deregulated is still skyrocketing.”

I read the above piece and was convinced the government on self destructive journey. Truly, after the increase in the price of diesel (due to deregulation), cost of production increased (as factories use heavy duty diesel generators for power) which increased the price of locally made products, cost of doing business increased, food stuffs became more expensive because they are transported down south from the north with diesel powered truck/lorries. Telecommunication tariffs remained high because the claim they spend so much on diesel to power their masts. And as widely reported, businesses have moved to neighbouring countries before of the high cost of power in Nigeria.

A government that knows all this will still want to go ahead and to remove subsidy without first tackling the corruption is not a serious government. For example, kerosene is subsidized but do not get to end users at the subsidized rate, this goes to show how corrupts the oil sector is (need I emphasize that???).

President Goodluck Ebele Jonathan should rather fish out the culprits who has frustrated subsidy as he has claimed. But we all know that won’t happen and we know why. Fresh Air Indeed!!!

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