Economist urges incoming govt. to remove fuel subsidy in phases

Economist urges incoming govt. to remove fuel subsidy in phases
Economist urges incoming govt. to remove fuel subsidy in phases

Dr Tunde Adeoye, an Economist, has advised the incoming administration to remove  fuel subsidy in phases in order to reduce the severe impacts on Nigerians.

Adeoye, also an Associate Professor in Department of Economics, University of Lagos, gave the advice while speaking with the News Agency of Nigeria (NAN) on Sunday in Ota, Ogun.

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He said that subsidy should not be removed at once due to the socio-economic effects on the people.

NAN recalls that Mrs Ahmed Zainab, the Minister of Finance, Budget and National Planning, had said that the Federal Government will stop the payment of fuel subsidy by end of June.

Adeoye spoke while reacting to the Federal Government’s proposed plan to stop the payment of fuel subsidy by the end of June.

He stressed the need for the incoming government to exercise “political will” to remove the fuel subsidy.

The economist said that subsidy on fuel had been a big issue in our budgetary system, which had affected the economy negatively for decades.

He said that the payment of fuel subsidy to independent marketers, was a major challenge that guts over N7 trillion of our revenues annually.

Adeoye said that subsidy was a scam because it goes to the pockets of very few Nigerians, especially the so called independent marketers.

He added that some of the independent marketers did not bring any fuel into the country, and still claimed the monies from the Federal government, all in the name of subsidy.

“The payment of fuel subsidy by the federal government promotes corruption and makes some people acquired wealth for themselves

“The incoming administration needs to block all loopholes leading to sharp practices in the oil sector, if they intend to achieve success.”he said.

According to him, there is no doubt that if the government want to succeed, they have to remove the petrol subsidy.

He said that when subsidy is removed, transport costs would go up and the cost of transporting foods from the farms to the urban centres would be higher.

Adeoye appealed to the Federal government to cushion the effects of the removal of subsidy by reviewing salaries and wages of workers.

He said it should also subsidise food items, agricultural inputs and ingredients used for production.

The economist said that if the prices of food items were cheap, the public would not feel the impact of the removal of subsidy much.

He suggested that the 800 million dollars recently secured from the world Bank, should either be used to provide infrastructure to avoid the  money ending up in private individual`s pockets.