The removal of fuel subsidy by the fledgling Bola Tinubu-led administration has sparked a lot of debate and controversy over its timing and the implications it would have on the cost of transportation, goods, and other related issues across the country.
For context, fuel subsidy is a government incentive that pays the difference between the cost price and the fixed price of petrol, making it affordable for consumers. However, the government has argued that the subsidy is unsustainable and wasteful and that it needs to free up funds for other developmental projects.
The impact of fuel subsidy removal on the cost of living among Nigerians is expected to be significant and negative, at least in the short term. According to KPMG Nigeria, the inflation rate could rise to 30 percent in June 2023, up from 22.22 percent in May 2023. This means that the prices of goods and services will increase across the board, especially transport and food items, which are heavily dependent on petrol. The purchasing power of Nigerians will decline, and more people will be pushed into poverty unless the government provides adequate palliatives and social safety nets to cushion the effect.
In addition, the fuel subsidy removal could also affect the economic growth and stability of Nigeria, as well as political and social cohesion among the citizens, who may feel betrayed and exploited by the government.
However, some experts and analysts have argued that the fuel subsidy removal could also have some positive effects in the long run if well managed and implemented. They claim that the removal could reduce corruption and inefficiency in the oil sector as well as encourage investment and competition in the downstream industry. The removal could also free up funds for the government to invest in other sectors such as health, education, infrastructure, and renewable energy. The removal could also spur innovation and diversification in the economy as the federal government looks for alternative sources of income and energy.
The Nigerian Tribune went to the streets to find out how the removal is affecting Nigerians.
Daniel Adeoye (Photographer)
In terms of transport, moving from one place to another is now two times more expensive. The cost of transporting my models and even me has skyrocketed.
When in the studio, we’ll have to use a power generator, and buying fuel is now a problem. You will hardly find fuel. Even when you find it, the price per litre will be annoyingly high.
Aderonmu Inioluwa (Content creator)
As a content creator, the removal of the fuel subsidy has affected me in the form of the high cost of transportation. Being a student on the OAU campus, a new price list was released for locations around campus, which is now almost twice the initial prices before the removal of the subsidy. I hope the government does something about it as soon as possible.
Alabi Oreayo (Nurse)
As a nurse, the fuel subsidy has affected me in terms of transportation. The cost of transportation is very high now, and there’s really not much at hand. So, I’d have to wait for a bike or cab that would accept the fare I have, which would take up to 30 minutes or an hour before I get one. It is already taking up part of the time I am meant to use at the hospital ward. It means I am now missing out on some activities I am meant to do, like reporting and attending to patients. Now, when I arrive late, I have to meet up with other nurses to fill me in on what happened while I wasn’t there.
Rahmat Oladejo (Student)
Things are more expensive in school now. The food we were buying for N400 has increased to N700 because of the high cost of fuel. We were even unable to do some practical classes because of this fuel subsidy removal. Students were unable to go to their classes and houses early because the transport fare was too much.
Banji Aje (Barber)
The fuel subsidy removal has made us increase the prices we charge our customers. We have even lost some customers who can’t drive in with their cars to get a haircut. Sometimes, I even run at a loss because not everyone can afford the new price, and we are all in Nigeria, so we have to pity some customers.
Olatunji David (Secondary school student)
Going to school has been stressful nowadays because of fuel subsidy removal. Our mom took us to school before, but now we board bikes to school, and it’s even more expensive and dangerous. We just hope that the government does something about it really quickly because it is really affecting us.
Olatunji Titilola (Businesswoman)
The fuel subsidy has really affected the price list in the market. Things we used to buy cheaply have all gone up. Getting to the shop every day is even more stressful. Before the fuel subsidy issue, I used to go to shop from home every day. But now, once I get to shop on Monday, I stay there till Friday in order to manage the fuel in my car.
Ayanfe Olorunleye (Photographer)
The fuel subsidy has really affected me as a photographer. The amount I used to take a bike to the studio has gone up. Getting to the studio, there would be no light, and we have to keep the generator running because we have pictures to edit. Even getting models hasn’t been easy either; they charge more than before, and we understand the nature of the country.
Oluwatimileyin Oyebamiji (Model)
The fuel subsidy has affected me in various ways due to the hike in transportation fares.
Considering the fact that I don’t have my personal car, I have to resort to ride services like Bolt and Uber when going for photo-shoots. Even for short distances, they have increased the price, not to mention long-distance trips. Hopefully, it will be resolved with time because it’s taking a toll on my day-to-day activities.
Oluwanifemi Sosanya (Make-up artist)
The fuel subsidy removal has affected me in terms of transport expenses: bike riders now charge way too much. Our business is now less profitable because people no longer have enough money to pay their bills; there’s an increase in the costs of make-up sessions and make-up products.
Darasimi Okeowo (Software developer)
As a software developer, the removal of fuel subsidy in Nigeria has brought forth a unique set of challenges that directly affect me and my professional life. Fuel prices have skyrocketed, causing a significant increase in transportation expenses. This surge in costs has made commuting to work and attending professional events financially burdensome, ultimately reducing my ability to network and engage in valuable industry interactions. Additionally, the removal of fuel subsidy has a trickle-down effect on the economy, impacting the overall cost of living. The increased cost of transportation has led to rising prices of goods and services, making it harder for me to manage my personal finances effectively. This financial strain has limited my ability to invest in tools, resources, and courses that would enhance my software development skills and keep me competitive in the ever-evolving tech industry. In essence, the removal of fuel subsidy in Nigeria has impacted my day-to-day life.
Marvelous Auda (Hair stylist)
I’m a student and on the other hand, I have taken my time to learn hair dressing skill as an addition to my career. As a hair stylist, the removal of subsidy on fuel has affected me because the price at which I buy the products I use for making my customers’ hair has increased. In fact some prices have doubled.
Customers are not ready to pay more than they used pay; I don’t make profit like before.
Sales are not moving well like before, everything is just too difficult to bear.
Transportation from my house to shop is too expensive. I just hope things don’t continue like this.
Anjolaoluwa Auda (Fashion designer)
As a fashion designer, the fuel subsidy removal has affected me because the prices at which I buy materials for clients to make dresses have increased. Sadly, most of my clients are not willing to pay any additional money because they are used to the former price.
This has caused me lot of losses because most of the money paid by clients is used for materials only and the workmanship fee is just peanuts. This has really affected my sales.
The transportation cost from my house to my workplace is not bearable at all. I just pray there’s a solution to this fuel crisis as soon as possible because it’s too hard to bear.
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