The recent comments by Nigeria's Minister of Finance and Coordinating Minister of the Economy, Wale Edun, regarding the removal of the fuel subsidy display a concerning lack of understanding of the real-world implications for the Nigerian people.
Edun's claim that "the poorest of 40 percent was only getting four percent of the value" of the fuel subsidy is simply not supported by the facts. According to official figures by both the Federal Road Safety Commission and the Nigeria Bureau of Statistics, commercial vehicles - used by low-income Nigerians for essential daily commutes - account for over 50% of the country's total daily petrol consumption. Out of the estimated 12 million registered vehicles in Nigeria, around 7.2 million are commercial vehicles, with about 90 percent of those (6.5 million) running on petrol. If each of these vehicles consumes just 5 liters of petrol daily, this alone accounts for approximately 32.5 million liters of petrol per day—over 50% of Nigeria's reported daily fuel consumption. This statistic starkly contradicts the Minister’s assertion that the poor were not benefitting from the subsidy.
This doesn't even include the massive fuel usage for powering generators that have become a necessity for households and businesses alike due to the country's unreliable electricity grid.
The minister's assertion that "nobody knows the consumption in Nigeria of petroleum" is equally troubling. How can policymakers make informed decisions about a sector so vital to the economy and the lives of citizens without accurate data on consumption patterns? This speaks to a larger problem of incompetence that has come to characterize the Tinubu administration.
Furthermore, the minister's attempt to justify the fuel subsidy removal by claiming Nigeria is subsidizing neighboring countries is a flimsy excuse. Many countries around the world subsidize fuel for their citizens - this is a common economic policy tool used to support domestic industries and protect the most vulnerable. The fact that some Nigerians may have been exploiting the system does not negate the immense hardship that the subsidy removal has caused for millions.
The devastating impact on the "real sector" of the economy, as well as the daily lives of average Nigerians, is undeniable. Skyrocketing transportation costs, soaring prices of goods and services, and the increased burden on households struggling to power their homes - these are the realities that the government seems intent on downplaying or simply ignoring.
It is high time the Tinubu administration abandoned the false narrative peddled by international financial institutions and instead prioritized the well-being of the Nigerian people. The government must acknowledge the significant role that fuel subsidies play in supporting the economy and the livelihoods of the poor, and work towards finding more targeted and equitable solutions, rather than pursuing ill-conceived policies that degrade the economy and exacerbate the suffering of the masses.
