The news of the government of president Mohammadu Buhari plans to remove the fuel subsidy and peg the price of petrol at N85 per liter met some strong mixed reactions. Under normal circumstances one cannot control what is not in one’s hands or control. That is why it is hard for any government or body or group to control prices of goods that are not directly produced by such group or body or government. But for the fact that such is being promised by this administration is really raising some eyebrows. Some of the questions are
1, how would the government control price of fuel when they will not pay to subisdize the price as it was done under the susbidy scheme?
2, does it mean they are trying to lie to the public about subsidy removal when such is still in place?
3, how would the government influence the price of petrol unless it will refine its own petrol and sell it at lower cost and drive the price down?
It is either the government is going to produce or refine enough petrol and stop the private refiners or importers from selling petrol and diesel at high prices than prices pegged by the government, or it is indeed a falsehood saying that subsidy has been removed but simultaneously pegging the price of petrol at N85. Meanwhile, it is interesting to compare the price of petrol under the past government, which many complained about, and the said pegged price by the present government. It is interesting to see that the price of petrol was a lot cheaper under president Goodluck Jonathan’s government than it is now under president Mohammadu Buhari’s seven month government. What transpired between that time and the last seven months of this government that created such high increase in price? It calls for in depth analysis in order to seek answers to the questions.
Fuel and its impact on the economy
it is almost always forgotten how the price of fuel-diesel, kerosene, benzene and other hydrocarbon derivatives affect the economy. In Nigeria where many citizens use all kinds of hydrocarbon derivatives to power their generators for both businesses and homes. Such increase in fuel price will have strong effect on the prices of other goods and trickle down effect on the economy. It is very interesting as well as worrying to visualize the effect on the economy if this current trend of price increase is not checked. This will concomitantly cause increase in inflation rate. Knowing that inflation was reduced from double digit to single digit by the former minister of finance Dr Ngozi Oknojo-Iwela. Such upward drive in inflation rate and the price increase of foods and commodities, or simultaneous decrease in the value of the national currency would be a serious blow to the citizens. It is really very interesting to see how all these will play out in the next coming months and years in the country. It appears the president and his aides and the minister of finance are already aware of it and have started preparing the citizens for it. The words from both the president and the finance minister Mrs Kemi Adeosun concerning how hard the next year would be, is somehow a harbinger of the analysis here. I am afraid there will be untold hardship on its way towards the people.