Facts and fallacies of fuel subsidy

Umana Okon Umana, an economist, is the former governorship candidate of the All Progressives Congress (APC) in Akwa Ibom State. In this piece, he highlights the fallacies associated with the fuel subsidy and what can be done to guarantee regular fuel supply for domestic consumption.

Many boisterous and healthy debates have broken out on social media platforms and, indeed, other fora on the recently adjusted price of petrol. But quite unexpectedly, some of the arguments are grounded in myths. Here are a few and my attempt to burst them.

Pius Adesanmi - It Will Get Worse Before it Gets Better

One argument being pushed by the Federal Government (via Osinbajo et al) and supporters of fuel subsidy removal (appropriate pricing, deregulation, downstreaming, market remedy - they have called the beast so many names my head is spinning) borders on the idea of the impenetrable darkness which always looms before the glorious light at the end of the tunnel. This is a very seductive argument, supported by the great spiritual and literary texts of the world. It is a powerful motif in literature, a recurrent theme in myths and legends: great difficulties, pitch darkness, then, light!

In the great literary mythologies, from the Greeks to the Romans, via Ananse in Ghanaian folk tales and the Tortoise in Yoruba folktales, pitch darkness and the light that follows it at the end of the tunnel are always moderated by one inescapable element: sacrifice. So here is the basic plot of one of the greatest motifs in human imagination: darkness + sacrifice = light. The emphasis is on sacrifice.

Difficult to sit on the Fence: FUEL SUBSIDY: YES OR NO?

It's difficult to sit on the fence but even non economics must recognise this.

- Does the price of a barrel of crude oil vary with a nation's minimum wage?
- Does it vary by which region of the world you live.
- Does the refining cost of petrol vary according to a nation's minimum wage. 

Fuel to sell for #145 per litre says FG: “We shall resist this increase” - NLC

The Nigerian Labour Congress on Wednesday said it would resist the federal government’s scrapping of fuel subsidy and increase of petrol price to about N145 per litre.

“The unilateral increase in prices of petroleum products today by government represents the height of insensitivity and impunity and shall be resisted by the Nigeria Labour Congress and its civil society allies,” the congress said, through a statement by its General Secretary, Peter Ozo-Eson.

The statement added, “With the imposition on the citizenry of criminal and unjustifiable electricity tariff and resultant darkness and other economic challenges brought on by the devaluation of the Naira and spiraling inflation, the least one had expected at this point in time was another policy measure that would further make life more miserable for the ordinary Nigerian

Confab delegates reject fuel subsidy removal

There was uproar on Tuesday at the ongoing national conference in Abuja as delegates finally rejected the recommendation of the Confab Committee on Public Finance and Revenue for the total removal of the fuel subsidy by the Federal Government.

The Committee chaired by a former Governor of Nasarawa State, Adamu Aliero, had recommended a total removal of subsidy on petroleum products, arguing that this has been a major financial burden on the nation.

The recommendation had generated heated debate at the plenary and created sharp division among the delegates who accused one another of vested interests.