In a recent interview with the Financial Times, Obasanjo faulted how Tinubu’s administration removed the fuel subsidies, arguing that proper measures should have been implemented beforehand.

“There’s a lot of work that needs to be done. Not just wake up one morning and say you removed the subsidy.

“Because of inflation, the subsidy that we have removed is not gone. It has come back,” the former President stressed.

He said there must be investor confidence in Nigeria.

“You have to go from transactional economy to transformational economy”, he added.

Obasanjo’s remarks come amid ongoing hunger protests in Nigeria. The protests, which began on Thursday, have entered their fifth day with a major demand for the return of the fuel subsidy regime.

In response to the protests, President Tinubu addressed the nation on Sunday, appealing to protesters to suspend their demonstrations. He acknowledged that the decision to remove the fuel subsidy was painful but necessary, describing it as a noose around the economic “jugular of our Nation and impeded our economic development and progress.”

Recall that President Bola Tinubu, in May, terminated the longstanding practice of subsidizing gasoline by swapping crude, a move that significantly impacted Nigeria’s revenue, foreign exchange, and debt.

Minister of Information and National Orientation, Mohammed Malagi, defended the subsidy removal on Thursday, arguing that it is in the best interest of the country.

During an appearance on Channels Television’s Sunrise Daily, Malagi addressed the economic challenges, stating, “The foundation of our economy had taken a beating a long time ago.

The substructure of our national economy has been one that cannot hold a meaningful substructure on it.”

Malagi stressed that the President’s decision to end the subsidy was crucial in resetting the economy, acknowledging the anticipated difficulties and emphasizing the necessity of freeing up resources for meaningful development.

He highlighted that removing the subsidy was a proactive measure, preventing a more severe impact on the nation’s progress.

Responding to concerns about the subsidy’s impact on the masses, Malagi revealed ongoing investigations into individuals benefiting from the subsidy, commonly referred to as “subsidy thieves.”

He assured that security agencies are actively working to address these issues, stating, “Security agencies are doing their jobs in that direction.”

The Federal Government contends that the subsidy removal is a strategic move to redirect resources and foster long-term economic stability, despite the immediate challenges faced by Nigerians.

This significant resolution stems from a motion introduced by Bashiru Dawodu, a prominent lawmaker representing Lagos State.

During the presentation of his motion, Dawodu emphasized that the National Health Insurance Scheme (NHIS) falls short in providing coverage to vulnerable Nigerians, with only 5 million individuals currently enrolled.

He proposed that an allocation of N50 billion could extend NHIS coverage to an additional 5 million Nigerians, making it a compelling case for the government to redirect the savings achieved through subsidy removal.

Tinubu had previously removed fuel subsidies on May 29 and pledged to allocate the resultant savings to areas such as healthcare, education, infrastructure, and various other investments.

The lawmaker underscored the critical role that these subsidy savings could play in facilitating the enrollment of vulnerable Nigerians into the NHIS.

Dawodu highlighted the substantial financial implications of fuel subsidies, noting that in 2022, the Nigerian National Petroleum Corporation (NNPC) had expended a staggering N4 trillion ($9.7 billion) on fuel subsidies, with N3.6 trillion spent in just six months of 2023.

He further pointed out that the cost of covering 5 million individuals annually, at an average rate of N5,000 per person, amounts to approximately N5 billion.

Without the need for further debate, the motion was promptly adopted, with a directive issued to the National Health Insurance Authority (NHIA) to ensure the efficient implementation and diligent monitoring of this critical initiative.

Speaking during the National Executive Council meeting of the Natural Oil and Gas Suppliers Association of Nigeria, NOGASA, in Abuja, the marketers faulted the process followed by President Bola Tinubu in the removal of subsidies on petrol, saying measures that ought to have been in place before the removal were not taken.

The marketers insisted that the nation’s refineries ought to have been operational and issues around foreign exchange resolved before the petrol subsidy was removed.

The marketers questioned the Federal Government’s inability to end the illicit trading of dollars in the country.

Speaking at the meeting, NOGASA President, Mr. Benneth Korie, warned that the downstream in the country was under serious pressure as stations were shutting down due to harsh operational conditions.

He stated: “Depot owners are so terribly affected by the increasing cost of the crude and exchange rate to the extent that many depots are practically deserted as their owners are unable to secure bank loans to fund their business due to high interest rates.

“Banks are not willing to guarantee funds release to stakeholders as a result of the difficulty, instability and galloping foreign exchange rate. Many depots are presently dried up or out of stock.

“Worst hit are filling stations whose owners find it extremely difficult to secure funds to procure products for their retail outlets and both the independent and major marketers are so terribly affected that as at today, filling stations are shutting down in great numbers on a daily basis and dealers are going out of business with many more on the verge of bankruptcy because of their inability to secure funds to facilitate orders for their stations”.

PMS currently sells for between N580/litre and N617/litre, depending on the location of purchase, as the Nigerian National Petroleum Company Limited (NNPCL) has denied the reintroduction of PMS subsidy.

The Group Chief Executive Officer of NNPCL, Mele Kyari, had stated that there was no subsidy on petrol and attributed the queues at petrol stations to distribution challenges rather than a lack of supply.

However, oil marketers insist that subsidy on PMS has returned, highlighting the landing cost of petrol at N720/litre as of last week.

They argue that the government’s removal of subsidy without thorough consideration has led to the reimplementation of the subsidy, with Nigerians paying similar prices for petrol despite a significant increase in the exchange rate.

“I don’t know why the government keeps peddling lies. When they removed the PMS subsidy, a dollar was about N700 and they made us believe that the removal of subsidy would make the supply of products play according to the dictates of demand and supply, looking at forex as the benchmark.

“Now, this is just simple arithmetic, if you removed the subsidy when a dollar was about N700 and today the dollar is more than N1,000, and you are still supplying and giving products at almost the same rate, what is the magic? They are subsidising products as we speak.

“They are spending billions of naira to subsidise products, and because they know that this country may go on fire if Nigerians buy products at about N1, 000/litre, they keep twisting facts. Why can’t they come out and tell the world the truth?” the National Secretary, Independent Petroleum Marketers Association of Nigeria, Chief John Kekeocha, stated.

Kekeocha, stated that in the near future, there may be a scarcity of petrol in many areas, particularly those without major operators with tank farms, as independent marketers control approximately 80 percent of filling stations across the country.

Kekeocha pointed out that the high cost of diesel and the inability to import due to forex issues have hindered the operations of independent marketers, making it difficult for them to compete with tank farm owners selling at around N617/litre.

The cost of landing PMS currently exceeds N700/litre, making it financially challenging for many independent marketers.

To address the situation, Kekeocha emphasized the need for the refineries to work, producing petrol locally to reduce pressure on importation and lower costs.

He also argued that the exchange rate issue must be resolved, as this would influence petrol prices in the country.

Reports had surfaced indicating that the administration spent N169.4 billion in August to maintain the fuel pump price at N620.

While opposition parties seized on this revelation to criticize the Tinubu administration, the APC argued that these payments do not signify a return to subsidy.

The ruling party also condemned Phrank Shaibu, Media Aide to the PDP Presidential Candidate, Alhaji Atiku Abubakar, for spreading “fake news” and engaging in other efforts to discredit President Bola Tinubu’s administration.

The APC clarified that the government’s intervention in fuel pricing aims to ensure some level of price stability and predictability, which is different from the past fuel subsidy regime.

Felix Morka, the APC spokesman, accused Shaibu of making misleading statements and not understanding key economic and governance issues.

He attributed Shaibu’s comments to “post-electoral traumatic stress disorder” resulting from his boss’ electoral defeats.

Morka defended President Tinubu’s economic policies, emphasizing that they aim to remove long-standing distortions, accelerate economic recovery, and promote prosperity for Nigeria.

He highlighted the President’s appointments of experienced professionals in key economic institutions and the government’s initiatives in various sectors.

Morka also addressed diplomatic issues, including the Visa ban on Nigerians by the UAE authorities, diplomatic rapprochement with UAE authorities, and President Tinubu’s interactions with other world leaders, such as President Joe Biden.

In summary, the APC rejected claims of a fuel subsidy reintroduction, criticized PDP’s allegations, and defended President Tinubu’s economic policies and diplomatic initiatives.

One of the enduring issues that continue to stir debate and unrest is the matter of fuel subsidy. This contentious topic has remained a persistent concern for Nigerians, causing economic ripples that are felt not only in the larger cities but also within local communities like Ojodu. While the government has made efforts to address this issue, it remains a source of frustration for many, as the price of fuel affects transportation costs, food prices, and daily life.

Fuel Subsidy Removal:

Fuel subsidy in Nigeria had been a longstanding and contentious issue even before the events leading up to the presidential election tribunal judgment. The government had traditionally subsidized the cost of fuel to keep prices artificially low for consumers. This subsidy was intended to alleviate the economic burden on the average Nigerian and was deeply entrenched in the country’s economic policy.

However, over time, the cost of fuel subsidy had become a significant fiscal burden on the government. It was a drain on the nation’s resources, leading to budgetary constraints, mounting debt, and economic instability. Despite the subsidy, fuel scarcity remained a recurrent issue, with long queues at petrol stations being a common sight.

In 2012, the then-President Goodluck Jonathan’s administration made a controversial move by announcing the partial removal of the fuel subsidy. This decision triggered widespread protests and strikes across the nation. Nigerians were deeply divided on the issue, with many arguing that the subsidy removal would lead to an increase in the cost of living and further economic hardship.

The Catalyst for Change:

The year 2023 heralded a new era in Nigeria’s history, marked by a decisive shift in economic policy. The government, under the leadership of President Bola Tinubu, made the momentous decision to remove the fuel subsidy once and for all, when he announced in his inaugural speech on the 29th of May, 2023 that subsidy is gone. This bold step was not taken lightly but was seen as essential to chart a path toward sustainable economic growth and development.

“Subsidy is gone” Tinubu exclaimed during his inaugural address at Eagle Square, Abuja, shortly after he was sworn in as the 16th President of Nigeria.

He further explained, “We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favoured the rich more than the poor. Subsidy can no longer justify its ever-increasing costs in the wake of drying resources.”

The removal of the subsidy was met with mixed reactions across the nation. Citizens had long grappled with the high cost of living, and the prospect of higher fuel prices was met with apprehension. However, President Tinubu’s administration made a compelling case for the move, emphasizing that the funds previously allocated to the subsidy would now be redirected toward critical infrastructure, healthcare, education, and social welfare programs.

“We shall, instead, re-channel the funds into better investment in public infrastructure, education, health care, and jobs that will materially improve the lives of millions,” he said.

Impact on the Citizens:

The removal of the fuel subsidy had an immediate impact on the lives of everyday Nigerians. While the government’s rationale was to allocate funds to essential services, citizens had to grapple with the new economic landscape. Fuel prices surged, causing a ripple effect on the cost of transportation, goods, and services. The inflationary pressures were palpable, and families faced budgetary constraints.

Some more impacts include the following:

1. School Fees on the Rise: Education is the bedrock of any society, and Ojodu is no exception. However, recent times have seen a concerning trend as several schools within the community have raised their fees. For parents and guardians, this has become a source of worry. The burden of ensuring quality education for their children has become even heavier. Families that once comfortably covered their children’s school expenses are now confronted with the difficult choice of making ends meet or securing their children’s education. It’s a challenge that many in Ojodu are grappling with daily.
2. Food Prices Skyrocket: Another pressing concern is the drastic increase in food prices. The staple of Nigerian households, a bag of rice, has become a symbol of the economic struggle. What was once accessible at 25,000-30,000 Naira per bag now demands more than double that amount, exceeding 50,000 Naira. This price surge ripples through every aspect of daily life. From the cost of preparing daily meals to the overall household budget, the impact of these price hikes is profoundly felt. Families in Ojodu, like countless others across the nation, are adapting their food choices and spending habits to navigate this new financial reality.
3. Businesses Under Pressure: In the bustling markets and small enterprises that define Ojodu, the increased cost of living and doing business has not gone unnoticed. Entrepreneurs who once thrived in the community are now grappling with rising operational expenses. Some have been forced to adjust their pricing, potentially alienating customers. The economic landscape of Ojodu is evolving, and businesses are being put to the test. Adaptation and resilience are the watchwords, but the challenges remain palpable.
4. Shifting Work Modes: Organizations within the community have also felt the impact. Some have chosen to adapt by adopting hybrid work models, recognizing the need for flexibility in these uncertain times. This shift aims to balance employee well-being with operational efficiency. However, not all organizations have made this transition. Some have left their employees to face the financial reality of fuel subsidy removal on their own. For these employees, navigating the increased cost of living while maintaining their work commitments has become a formidable challenge.

Coping and Looking Forward:

In the midst of these trials, Ojodu stands as a symbol of strength and unity. The challenges posed by rising school fees, soaring food prices, and a shifting economic landscape are formidable, but they are not insurmountable. As we navigate these turbulent waters, let us remember that we are not alone.

Within our community, the spirit of Ojodu prevails. Neighbors support one another, and together, we can find innovative solutions. Education remains a priority, and by coming together, we can explore avenues to ensure that every child has access to quality learning. As we adapt our food choices and spending habits, let’s embrace the rich diversity of our local cuisine and the strength of our communal bonds.

Our local businesses are the lifeblood of Ojodu, and as they face economic pressures, let us continue to patronize and support them. By doing so, we strengthen our community’s economic fabric.

For those organizations that have adopted hybrid work modes, this flexibility is a testament to our ability to adapt and thrive in changing times. And for those who continue to face financial challenges, remember that Ojodu stands with you, ready to offer support and understanding.

In this evolving landscape, we are reminded that resilience is our greatest asset. Ojodu’s spirit, characterized by unity and determination, is our guiding light. Together, we will navigate these challenges and emerge stronger on the other side.

As Ojodu’s resilience shines brightly, let it inspire us to face each new day with hope and determination. The road ahead may be challenging, but it is one we travel together—a journey that leads to a brighter, more prosperous future for our beloved community.

The move comes as a response to the adverse effects of the removal of fuel subsidy, which has resulted in significant hardship for Nigerians.

Despite a previous court order prohibiting the NLC from striking in June, the congress asserts that it cannot remain passive while the populace continues to suffer.

The situation escalated after the Tinubu administration previously halted the subsidy on Premium Motor Spirit (petrol), leading to tensions between the government and organized labor.

While the government established a committee to engage in dialogue with the organized labor, the NLC and Trade Union Congress officials claim that the committee failed to facilitate meaningful negotiations.

The NLC’s national treasurer, Hakeem Ambali, confirmed the issuance of a seven-day ultimatum to the Federal Government to conclude negotiations with labor or face the consequences of industrial action, The Punch reports.

The NLC’s national president, Joe Ajaero, has yet to release an official statement on the matter or respond to inquiries from the media.

However, it is expected that the public will be informed of further plans shortly. The impending strike may have far-reaching implications if the government fails to meet the ultimatum set by the NLC.

In its recent Nigeria Development Update titled “Seizing the Opportunity,” the World Bank emphasized the importance of reallocating a portion of the subsidy savings to address the adverse effects on the population, as an estimated 7.1 million more Nigerians could be driven into poverty without appropriate measures to counterbalance the impact of subsidy removal.

The World Bank acknowledged the significance of removing petrol subsidies and implementing foreign exchange (FX) management reforms in rebuilding fiscal space, restoring macroeconomic stability, and initiating critical reforms to tackle macroeconomic imbalances.

It stressed that the current administration should capitalize on this window of opportunity to bring about transformative changes that would positively impact the lives of millions of Nigerians and establish a strong foundation for sustainable and inclusive growth.

The World Bank’s report, “Seizing the Opportunity,” underscored the necessity of implementing a comprehensive reform package that encompasses various complementary measures.

This package should include a new social compact aimed at safeguarding the poor and vulnerable segments of society, maximizing the collective impact on growth, job creation, and poverty reduction.

According to the report, Nigeria’s economic growth weakened in the first part of 2023, with a decline in real Gross Domestic Product (GDP) growth from 3.3% in 2022 to 2.4% year-on-year (y-o-y) in Q1 2023.

The challenging global economic environment has exerted pressure on Nigeria’s economy, but the report emphasized that domestic policies play a crucial role in determining the country’s economic performance and resilience to external shocks.

The World Bank highlighted the inadequacy of previous fiscal, monetary, and exchange rate policies, including the naira redesign program, in delivering the desired improvements in growth, inflation, and economic resilience.

With the removal of petrol subsidies, the government is projected to achieve fiscal savings of approximately N2 trillion in 2023, equivalent to 0.9% of GDP. These savings are expected to reach over N11 trillion by the end of 2025.

However, the World Bank noted that the immediate consequence of subsidy removal has been an increase in prices, adversely affecting poor and economically vulnerable Nigerian households.

Petrol prices have nearly tripled, and this price hike has a negative impact on households that directly purchase and use petrol, as well as those who indirectly consume petrol.

This includes households that own motorcycles or generators dependent on petrol, as well as those who rely on petrol for transportation.

The World Bank estimated that poor and economically insecure households will experience an income loss of N5,700 per month due to the subsidy reform. Without compensation, an additional 7.1 million people could be pushed into poverty.

The report highlighted the potential long-term adverse consequences as households, both current and newly poor, may resort to coping mechanisms such as forgoing education for children, avoiding healthcare facilities for preventive care, or reducing their access to nutritious food options.

To mitigate the negative impact of subsidy removal on Nigerians, the World Bank emphasized the necessity of compensating transfers to shield households from the initial price impacts of the reform.

In addition to immediate cash compensation, the government should articulate how the freed-up resources will be utilized in a new compact with the Nigerian people. This compact should outline support in the short, medium, and long term at the federal, state, and local government levels.

The World Bank recommended that the government, led by the National Economic Council (NEC), clearly identify priority areas for government investment and effectively communicate these to the public to gain support.

The compact should also commit to fiscal realism, considering the potential fiscal implications of substantial spending expansions that could lead to increased deficits in the medium term.

Shehu argued that only a new administration with strong public support could attempt such a move, specifically mentioning President Bola Tinubu in this regard.

In a statement posted on his verified Twitter account on Monday, Shehu clarified that Buhari’s administration, in its final days, could not eliminate the controversial policy due to the upcoming elections and the need for the All Progressives Congress (APC) to secure victory.

Implementing the new Petroleum Industry Act, which could have resulted in the removal of subsidies, could have jeopardized the party’s position in office.

Shehu further emphasized that while Buhari did not remove petrol subsidy, his administration eliminated other budget-draining and detrimental subsidies throughout its tenure.

He highlighted the importance of the APC addressing questions about subsidy removal, but in their absence, he felt compelled to offer an explanation.

Shehu also acknowledged the current Tinubu/Shettima administration and its successful handling of subsidy removal and currency unification decisions.

He commended their timing and skill in avoiding any crisis arising from these actions.

According to Shehu, the decision to remove subsidies, including those for the Naira and Premium Motor Spirit (PMS), was postponed and held back.

He argued that such a decision should not have been made during a period of heightened tensions in the country, as it could have exacerbated the situation.

Shehu suggested that only a new administration, backed by significant public goodwill, would be capable of attempting such a move, which he credited to the current Tinubu government.

Finally, Shehu highlighted the political reality of the Buhari administration’s final days, stating that it could not have fully pursued subsidy removal due to the impending elections. He claimed that any political party seeking re-election with a new leader would have faced similar constraints.

Polls reportedly indicated that the party would have lost the election if they had implemented the subsidy removal as outlined in the new Petroleum Industry Act.