- Seek palliatives as prices of food items, others soar
- Economists give tips on how to ameliorate citizens’ hardship
BY TIMOTHY AGBOR, BAMIDELE FAMOOFO, BENEDICT NWACHUKWU, FESTUS OKOROMADU AND MAYOWA SAMUEL
The hardship associated with the increase in the prices of Premium Motor Spirit across the country, as a result of fuel subsidy removal by the Federal Government, has led to changes in the lifestyles of Nigerians.
President Bola Tinubu had, during his inaugural address last Monday at the Eagle Square, Abuja, announced that the era of subsidy on fuel was gone.
Immediately he made the pronouncement, most filling stations started hoarding and increasing the price of the commodity in order to make brisk gains.
This necessitated queues at the filling stations as consumers began panic buying.
In a bid to make the fuel subsidy removal a reality, the Nigerian National Petroleum Company Limited approved an upward review in the pump price of petroleum products nationwide.
The adjustment in prices of PMS across the company’s retail outlets, according to a circular issued by the NNPCL’s Chief Corporate Communications Officer, Garba Deen Muhammad, was in line with current market realities.
As a litre of petroleum now sells for N500 and above, ordinary Nigerians are being negatively affected as prices of food items and transportation fares have gone up.
At some popular markets visited across the country, our correspondents observed that traders have been increasing prices of their commodities.
Also, service providers and artisans have started adjusting their charges. They blamed the hike in price of fuel for their actions.
The Nigeria Labour Congress has declared a nationwide strike, starting on Wednesday, if the Federal Government fails to reverse the new pump price.
However, checks by The Point revealed that some Nigerians were already adjusting to the new reality.
While some car and motorcycle owners have been opting for public transportation, owing to the hike in the price of petrol, other citizens have said they will only spend on essentials, which include food and health needs until the inflation subsides.
A University of Maiduguri student was said to have arrived at the campus on a donkey last Friday, owing to the hike in transport fares.
Stakeholders who spoke with our correspondents, including parents, teachers, artisans, traders, civil servants and retirees, lamented the hardship that the subsidy removal would further subject Nigerians to.
They called on the Federal Government to go back to the drawing board, engage in serious meetings with stakeholders and make requisite strategic plans before the subsidy would fully take effect.
While agreeing with the administration that the subsidy removal was needed for the good of the country, they submitted that President Tinubu embarked on a “fire brigade approach” with the manner he removed the subsidy and had inadvertently made the commodity a source of fresh sorrow for Nigerians.
This is despite the fact that the subsidy had been removed by the previous administration, according to analysts.
They stressed the need for governments to roll out palliative measures for members of the public to cushion the effects of the hike in prices of items, noting that families should be more cautious in spending and also adjust their unnecessary ostentatious lifestyles.
A teacher, S. O. Faniyi said, “Basically, we know this is going to happen eventually because the arrangements have been made. Notwithstanding, we will still have a way out of it by adjusting ourselves. We should cut our clothes according to the size of the materials.
“We should make sure that all essential materials that are needed to be purchased are gotten, and then extravagant lifestyles should be eschewed. Things that are not necessary should be avoided for now until things get better. I want to appeal to the government to provide succour by cushioning the effect of this subsidy.”
Similarly, a contractor, Andrew Ajeleti, submitted, “I will admonish all other families to be cautious of how they spend their money. They should be more focused on getting basic needs and not spending extravagantly because this problem is not solved anytime soon as there is no palliative from the government for now. Parents should be more creative in spending their income. Those who have cars should save fuel consumption by trekking if the distance is not far. We should be meticulous in spending.”
For a trader, who simply identified herself as Wuraola, the Federal Government ought to have put measures in place before announcing that the fuel subsidy was gone and therefore urged President Tinubu to find ways of mitigating the hardship that the petrol price hike had caused.
But, some economic experts have strongly identified with President Tinubu for pronouncing the removal of the fuel subsidy during his inauguration.
They said it had been an “economic suicide” that Nigerians buy fuel at N220 when the landing cost of PMS was about N400.
An Associate Professor of Economic History, Tunji Ogunyemi, said, “It does not make any economic sense that the NNPCL buys petrol at about N400 and they sell to Nigerians at the rate of N220. It’s like committing economic suicide. Therefore, the speech of the President on fuel subsidy removal couldn’t have come at a better time.
“If profiteers who had bought under a subsidy regime decided to sell at the new pump price of N500, no one can legislate that and we will leave them to their consciences.”
Justifying Tinubu’s action on the subsidy debacle, Ogunyemi said it would be illogical for the new administration to have waited till the end of June before taking steps on the subsidy regime, saying, “I think the President’s speech on the fuel subsidy was just, perfectly made, well-timed, appropriate and patriotic.”
Speaking on what the NLC could table before the Federal Government as means of mitigating the harsh effects of the spike so that Nigerians could heave a sigh of relief somewhat, the expert said, “There should be either a suspension or reduction in tariffs in the area of importation and the use of certain vehicles, particularly the ones to convey a large number of people. If you have cars, buses, you reduce the tariff on their importation, which will trickle down to the ordinary man.
“Two, you can also reduce tariffs for some consumables like poultry, daily products, it will also trickle down to the ordinary man. The third is to significantly, without the Federal Government deceiving itself, thinking that N30,000 is a wage, increase the salaries of workers; the time has come and it’s doable. What the Federal Government is going to use to increase the salaries of its workers will be far less than what it will spend on subsidies in just one month.
“The fourth measure I think the Federal Government can take to cushion the effects of the subsidy removal is for it to introduce, for those who work in urban centres, maybe something in the area of luncheon vouchers. The luncheon voucher of about N100, 000 for a very serious officer and urban transit programme. For those in the rural areas, the tariff reduction in products will trickle down to them and they will also benefit from construction of roads, water, education, facilities and other things.”
Speaking to our correspondent, a professor of capital market and lecturer with the Nasarawa State University, Uche Uwaleke, applauded the economic pronouncements but called for immediate constitution of a committee to coordinate the execution of the policies.
“I support the removal of the fuel subsidy due to its huge cost on the economy. Fuel subsidies have proven to be unsustainable. I equally suspect unification of exchange rates because doing so will discourage round tripping, bring more transparency to the forex market which supports foreign investments. However, in order to minimise the negative impact on the living standard of Nigerians, the issues of fuel subsidy and exchange rates unification, which he mentioned in his speech should be handled with care,” he admonished.
On his part, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, expressed optimism that the removal of petrol subsidy would open up the downstream sector and attract fresh investments.
He noted that it was extremely difficult to attract private investment into Nigeria’s petroleum downstream sector because of the unsustainable subsidy regime and the stifling regulatory environment.
“The subsidy removal will eliminate the distortions and stimulate investment. We would see more private investments in petroleum refineries, petrochemicals and fertiliser plants. Post subsidy regime would also unlock investments in pipelines, storage facilities, transportation and retail outlets. We would see the export of refined petroleum products, petrochemicals and fertilisers as private capital comes into the space. Quality jobs will be created,” Yusuf said.
He, however, stressed the need for the introduction of social schemes to reduce the burden of the subsidy removal on the low-income earners.
“We should make sure that all essential materials that are needed to be purchased are gotten, and then extravagant lifestyles should be eschewed. Things that are not necessary should be avoided for now until things get better”
“Immediate and short-term options include wage review in public service, the introduction of subsidised public transportation schemes across the country and reduction in import duties on intermediate products for food-related production to moderate food inflation.
“In the medium to long-term, there should be accelerated efforts to upscale domestic refining capacity, driven by private investments; accelerated investments in rail transportation by the government to ease logistics of fuel distribution across the country as well as domestic freight costs,” Yusuf stressed.
Salaudeen Ochuko said the situation was unbearable because it came at a time people were struggling with the burden created by the cashless and naira re-design policy of the CBN a few months ago.
He said, “The situation is seriously unbearable. People don’t have money, no increment of our salary but transport fares have been outrageously increased. From Jikwoyi-Karu we used to pay N300 to the Federal Secretariat, but it is now N500. From the Secretariat to Banex, it is now N200. Commercial motorcycle riders now charge N200 in places where we used to pay N100.
“From my house to the office and back to my house I spent N1, 800 daily last week and how much is my salary in a month? The President did not consider us before taking the decision. Honestly, this decision is unnecessarily hasty. Maybe he meant well but you can see that the outcome is anti-masses.”
Mrs. Joyce Kelvin said, “We were complaining of hardship under Buhari’s government, it is now we will see what hardship is. A ‘mudu’ of rice that sold for N1, 200 is now N1, 800. How can we survive this situation for Christ’s sake? They said they removed subsidies for the sake of the ordinary people but we are the same people suffering from it.
“The big men don’t buy ‘mudu’ of rice or beans and they are still driving their big vehicles but we are now trekking. The President should do something. He has started with a bad policy because the policy is affecting the poor masses.”
Uber, Bolt, others set for fare hike
Meanwhile, the Amalgamated Union of App-Based Transport Workers of Nigeria has expressed concerns over the ripple effect of the new fuel price on its members.
National President of the union, Adedamola Adeniran, in a statement, said the new fuel price was causing hardship on its members’ earnings and patronages.
Adediran said this was because members lacked the capacity to increase the fare, unlike independent cab drivers, branded taxi drivers, bus drivers and others.
He, therefore, urged App-Based Transport companies, including Uber, Bolt, Lagride, Indriver and others, to urgently review their price upward by 200 per cent and set the minimum trip fare at N2, 000 respectively.
He also urged the companies not to deactivate any of the drivers as a result of the fuel subsidy removal.
We’re not joining the strike until… Civil Servants
The Association of Senior Civil Servants of Nigeria has disclosed that it will not be joining the nationwide strike until negotiations are over and government reneges on the agreement reached.
“But be that as it may, they’ve made their positions known to us, we also want to make our positions known to them. If you go on strike now, it’s still the same masses that will suffer”
The President of the ASCSN, Tommy Etim Okon, disclosed this to The Point in his reaction to the strike notice issued by the President of the Nigeria Labour Congress, Joe Ajaero, which is billed to commence on Wednesday.
The ASCSN president said all avenues must be exhausted first, stressing the need for constructive negotiation to be held with the government before deciding to go into any mass action.
He stated, “We had a meeting with government representatives on Wednesday. They brought out their positions and on Friday, we the Labour met, that’s TUC, to also get a mandate from our NEC.
“We need to engage the government constructively because you can’t be in the midst of negotiation and then you say you’re going on strike. We’re going to make our position known to the government. It is after we do that and the government does otherwise, then we’ll know the next point of action.
“Everybody is suffering, not only workers in Nigeria. If the best way is for them to say we’ve taken out the fuel subsidy, and this is what we’ve agreed on, what will be done to cushion the effects, then I think everybody will be on the same page.
“It is affecting me, you and even civil servants. The way it is affecting you is the way it is affecting the civil servants. It is an ill wind that blows nobody any good but what is more important is that we need to engage the government to get relief, in terms of allowances, palliatives and incentives in order for the situation to be put in check.
“If you look at the subsidy regime, it is not sustainable. So, we’re not against the removal, what we’re against is the government fixing the price while negotiations are on and making the announcement before negotiations are concluded. You can’t expect the labour union to negotiate at gun point.
“But be that as it may, they’ve made their positions known to us, we also want to make our positions known to them. If you go on strike now, it’s still the same masses that will suffer.
“For now, you can, if you have the money, drive into the filling station and buy petrol. But when you go on strike, you’ll find out that it will be more cumbersome for the workers because even the marketers will begin to hoard their fuel. Before you know it, it still goes into the black market and people will then start buying one liter for over N1, 000.”
“The best thing to do, we believe, is, let’s engage the government and let’s see what the government wants to come out with, and let the government see what we’re also coming out with, then we can determine what to do, I think that’s the best way forward,” Okon said.
