As the government’s decision to end fuel subsidies continues to cause a wave of suffering throughout the country, rage and frustration have reached a boiling point in Abuja and other parts of Nigeria. 

Subsidies have artificially lowered fuel prices for years, giving ordinary Nigerians who are struggling with a high cost of living some respite. But now that the government claims to be financially exhausted, Nigerians are bearing the brunt in hard ways.  

Nigeria spent a total of N5.3 trillion on fuel subsidies between 2017 and 2022, according to the Nigeria Extractive Industries Transparency Initiative (NEITI). This amount is roughly $14.4 billion in value.

In his inaugural speech on May 29, 2023, Nigeria’s president, Bola Ahmed Tinubu, stated that “we cannot afford to pay for fuel subsidy, there is no more budget for fuel subsidy.” Many government players have characterised this expenditure as worrying. 

Prior to the government’s decision to stop them, the nation was devoting a sizeable portion of its budget to subsidising fuel costs. The World Bank estimates that Nigeria spent 1.2% of its GDP on fuel subsidies in 2019.

Despite the worrisome and bogus expenditure, the common man on the street paid a deaf ear to these figures. 

Voices of discontent echo through the air, with motor vehicle drivers taking the brunt of the impact. The ever-increasing fuel prices have led to a sharp surge in transportation costs, making it challenging for them to make ends meet. 

The cost of living for common people increased dramatically as a result of the sharp rise in the price of petroleum products.  According to the Nigerian National Bureau of Statistics, inflation rates increased by over 12% and reached a four-year high in the months immediately following the removal of subsidies.

Taxi driver Adamu described his situation: “I used to fill my tank for a reasonable amount, but it is starting to become unaffordable. I hardly have enough money to pay my bills, much less provide for my family.

Not just Adamu, ordinary people in the streets are protesting the skyrocketing fuel prices, calling on the government to look into their plight.  

Many are struggling to afford necessities, and the hardships are pushing families to the brink of poverty. Michael Tertseer, a street vendor in Makurdi, Benue State, said tearfully, “The price of everything is going up—food, medicine, even school fees. How are we supposed to survive?”

However, in the midst of this chaos, is there a lesson Nigeria can learn from other countries that have removed subsidies? 

Lessons from Other Countries:

Malaysia: In 2014, Malaysia began a gradual reduction of fuel subsidies, allowing for a smoother transition. 

Over a span of two years, the government phased out the subsidies while implementing targeted cash transfer programs known as “BR1M” to provide financial assistance to low-income households. This approach helped cushion the impact on vulnerable citizens.

 One of the criticisms of the removal of subsidy isn’t the decision to remove the subsidy, Policy makers and CSOs have faulted the President in the area of policy communication. 

In May, when Tinubu announced the removal of subsidies and made the comment “Fuel subsidy is gone,” media reports had it that fuel subsidies were still available until June, but the way the president made the announcement did not go down well with the oil marketers, and from there, the price skyrocketed. 

If the Nigerian government has learned something from Malaysia’s method, it might be successful. 

In 2019, Iran abruptly ended fuel subsidies, leading to widespread protests and social unrest. The government’s sudden decision resulted in fuel prices increasing by as much as 300%, causing severe economic hardships for citizens. This is a similar case to Nigeria’s. The lack of preparation and alternatives for citizens resulted in widespread suffering, emphasising the importance of a well-thought-out and gradual transition.

Some recommended Solutions are currently available for Nigeria. 

Investment in Renewable Energy:

Countries that have invested in renewable energy sources have not only reduced their dependency on fossil fuels but also improved energy security and reduced greenhouse gas emissions. According to the International Renewable Energy Agency (IREA) in 2020, countries such as Germany and Denmark generated more than 30% of their electricity from renewable sources.

Public Transportation Impact:

Countries with well-developed public transportation systems have experienced several benefits. For instance, Japan boasts one of the most efficient public transportation networks globally, which has significantly reduced private car usage and the nation’s overall fuel consumption.

encouraging public transportation and investing in modern, efficient systems can alleviate the burden on motor drivers and commuters alike. By providing affordable and reliable public transport options, the government can not only reduce fuel consumption but also ease the strain on citizens’ wallets.

Transparency and Corruption in Nigeria:

Nigeria has struggled with issues of corruption and mismanagement, particularly concerning public funds. According to the Corruption Perceptions Index 2021 by Transparency International, Nigeria ranked 149 out of 180 countries, indicating high levels of corruption in the public sector.

Transparency and accountability in the management of funds are also paramount. A clear and well-communicated plan for the gradual phasing-out of fuel subsidies can build trust and understanding among the populace. Additionally, measures to curb corruption and mismanagement will ensure that the resources allocated for social welfare programs genuinely benefit the intended recipients.

As the sun sets on the turbulent streets of Nigeria, hope emerges on the horizon. The fuel subsidy issue has illuminated the urgent need for the government to prioritize its citizens’ well-being and create a more resilient and inclusive economy. By learning from the experiences of other nations and adopting a comprehensive approach, Nigeria can navigate this challenging period and emerge stronger than ever before.

In conclusion, the decision to end fuel subsidies has unleashed suffering and hardship upon Nigeria, affecting the lives of motor drivers and ordinary people alike. To ease the burdens, the government must invest in alternative energy sources, implement targeted welfare programs, promote public transportation, and ensure transparency in financial management. By taking these measures, Nigeria can weather the storm and create a brighter future for all its citizens. Only through collective effort and visionary leadership can Nigeria transcend this challenging chapter and embrace a prosperous and equitable future.