By Noel chiagorom
Before the Ahmed Bola Tinubu’s administration, the total loan in the first quarter of 2023 was $49 trillion, but this has significantly increased to N121 trillion, the equivalent in dollars is $91.46 billion. By the first quarter of 2024, representing an increase of N72 trillion while Buhari’s ways and means in eight years was N30 trillion, according to the Senate committee.
On May 29, when Mr. Tinubu assumed office as president, the naira traded at about N780 per dollar. However, since Mr Tinubu announced exchange rate unification a few days after taking office, the naira has been on a free fall, hitting N1,700 at one point. At the Central Bank of Nigeria’s (CBN) official window, the naira has weakened by 264 (57.26 percent) to 461 per dollar as of May 16, 2023 from 197/$ in 2015 when Buhari assumed office. At the end of Buhari’s administration, the naira to the dollar exchange rate in the official market was N464.51, while that of the black market averaged N762.
Under President Mohammadu Buhari regime, the pump price of petrol is N145.00k per litre.
Before President Tinubu’s inauguration on May 29, 2023, fuel retailed at N198 per litre. Following his “Subsidy is gone” declaration, to end subsidies during his inaugural address, fuel prices immediately skyrocketed to N540 per litre at Nigerian National Petroleum Corporation Ltd (NNPCL) outlets. It has also increased to N1500 and the price keeps on fluctuating up and down till date.
However, while the naira equivalent of loans acquired under the Tinubu administration shot up, the dollar equivalent has reduced.
Fuel subsidies in Nigeria have a complex mix of effects, both positive and negative. They lower fuel prices for consumers, potentially benefiting lower-income households who rely on fuel for transportation and cooking.
Subsidies can make fuel more affordable for consumers, especially those in lower-income brackets.
Reduced transportation costs:
Lower fuel prices can translate to lower transportation costs for goods and services, potentially stimulating economic activity.
Increased fuel consumption and more profit as a result of turnover.
Subsidies can lead to higher fuel consumption, as turnover bring higher profits.
Therefore, what is the purpose of subsidy removal if it does not have a positive effect on the country’s economy?
I’m still surprised that no amount have been saved as a result of subsidy removal by this administration since inception. No difference from the past administration when fuel subsidy was not removed. Therefore, we demand for accountability and transparency for the proceeds made from the sales of fuel as a result of subsidy removal. The Senate should form a committee that will look into this matter.
