Fuel Subsidy energy security we can’t do without

Fuel Subsidy: energy security we can’t do without

The Media Advocacy West Africa – MAWA Foundation rejects fuel subsidy removal because fuel subsidy is energy security that we cannot do without.

Mr. Bola Tinubu, the Nigerian president on assumption of office on the 29th day of May 2023, announced a total removal of fuel subsidy; an action that has led to fuel selling at N617 and N620 per liter depending on where you are buying from. Nigerian state continually complained she is losing huge amounts of money on paying subsidies. The state says it cannot cope with expenses, an argument Mr. Tinubu relied on to justify his action.

What the Nigerian state failed to tell its citizens is that globally, countries invest hugely in subsidizing fuel to allow for cheap and affordable energy that will drive production. This is because affordable energy is fundamental for manufacturing. For instance, China, Brazil, France, Germany, Japan, Taiwan, South Korea, and the United States are examples of countries that spend hugely on fuel subsidies. And, just last year (2022), fuel subsidy in different countries globally was estimated to have hit trillion dollars.

The problem with Nigeria’s subsidy removal is that over the years, the country has continued to lack good journalism that will educate the people and stir conversation that will lead the government on good development policies and programs.  The media has continually pushed the narrative that makes subsidy look like a scheme that is a waste of public funds. They make no effort to show how fuel subsidy is the only way to provide cheap energy that will boost production for a viable economy.

The truth is that an import-driven nation like Nigeria needs fuel subsidies to allow cheap energy for businesses that will enable a competitive productive economy. China and USA know this truth and that is why they are among the world’s largest economies.

The Manufacturers Association of Nigeria (MAN), in its 2022 report, says they expended over N144 billion on generators as an alternative energy source. When you remove fuel subsidies, it means a total collapse of energy security which will render businesses impotent and destroy the economy completely. And this will surely trigger unemployment, poverty, and a high crime rate.

There are two things a country must address if it must make progress, energy, and food security. Fuel subsidy addresses the energy security needed for a productive and competitive economy and Nigeria like any other country cannot do without it.

We call on the Nigerian state to reinstate the Fuel Subsidy if she is serious about building a productive and competitive economy. The subsidy is not the problem, corruption is, and if the state cannot address corruption and goes ahead to institutionalize it, the reason for the government which is legitimate to manage public resources has been defeated. Therefore, the government no longer serves the purpose it was meant to serve, do we want to continue this way?

We will like to remind the government that no country builds a competitive and productive economy without cheap and affordable energy that is made possible through fuel subsidies. At the moment, petrol is Nigeria’s energy security and until that changes, removing fuel subsidies will destroy production and render the economy impotent.

Audu Liberty Oseni

Coordinator, MAWA Foundation

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