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Business News of Tuesday, 30 May 2023


Nigerians need context to President Tinubu’s declaration on fuel subsidy removal – Taiwo Oyedele

Taiwo Oyedele Taiwo Oyedele

Taiwo Oyedele, Fiscal Policy Partner and Africa Tax Leader at PricewaterhouseCoopers (PwC) has said that the Tinubu administration and relevant agencies need to provide context to the fuel subsidy removal declaration.

Speaking on Channels Television on Monday night, Oyedele said that during the presidential campaign season, President Tinubu was very clear on his stance as regards the fuel subsidy removal.

According to Oyedele, the president’s declaration was proof of the decision he had already made to remove the fuel subsidy. He said:

“What needs to happen now is that the President, the Nigerian National Petroleum Company Limited (NNPCL), and the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA) need to provide context to that declaration made by the president.”

Controlled and phased manner

Oyedele said he does not believe the Tinubu administration will literally remove the petrol subsidy immediately, as the full implementation will probably take a couple of weeks or more. However, he maintains that what the administration does not want is to escalate the situation before removing the subsidy.

He said: “The context that needs to be provided is that the removal will be done in a controlled, phased, and responsible manner. This will also include ensuring that there is a sufficient petrol supply.”

Efficiency in FX

Oyedele also said that the Tinubu administration needs to also make sure that while removing the petrol subsidy, they will make efficiency available, including the excess amount we are consuming from foreign exchange to import the amount of petrol that the country cannot even explain. He highlighted the fact that it is very embarrassing that Nigeria does not know exactly the quantity of petrol the country consumes.

He said: “When the subsidy on diesel was removed, the consumption rate went down by 50%, so, I imagine that the consumption of petrol would also go down by 50% or maybe more. We can make that FX available for the importation of diesel and kerosene, such that while we are having some marginal increases in the price of petrol which in my view should not be up to a 100%, compared to what we have now, we will have a significant reduction in the price of diesel (N840 per liter on average) and kerosene (N1000 per liter on average).”