Removal of Fuel Subsidy Removed Nigeria from Life Support

Removal of Fuel Subsidies, removed Nigeria’s economy from life support. 

You're right that fuel subsidy enriched the petroleum marketers. Thanks for that thoughtful statement. However, your argument needs to be further explained. Read through with zest and humility, dear friends and family.

That you prefer this unstable and tough socioeconomic decrepitude Nigeria is plunged into because you don't want petroleum marketers to be enriched is really thought provoking. 

Nations such as Qatar, UAE, Saudi Arabia, Iran, and Russia, all emerging economies, use subsidies to stabilize the economy, improve standard of living in the midst of limited economic diversification. They're better than Nigeria. 

China and the UK historically subsidized energy to keep industries competitive. The UK taxed North Sea oil profits to fund public services, while China manipulates energy prices to boost manufacturing. Why can't Nigeria tax oil marketers to subsidize fuel? 

You don't recycle revenue by increasing FAAC to governors. Unless you want them to all join you in APC, after looting the revenue that belongs to the poor. Oil-rich nations (e.g., Saudi Arabia, Qatar) treat subsidies as a form of wealth redistribution, using oil revenues to offset domestic fuel costs which positively affects the people directly. How else can the poor benefit from our oil wealth? No free healthcare; no free tertiary or skill education; no free housing; no jobs; no security; no welfare? 

You're right and also wrong. 

Complete removal of the fuel subsidy has destroyed our SMEs, spiked inflation, and shrinked GDP by -41.8%, caused death of many human beings, expanded the poverty levels, led to high levels of insecurity, and utterly chased international businesses and FDI away. 

Bola Ahmed Tinubu should have replaced Rogue Marketers, disbanded the cartels, licensed new marketers under strict conditions. 

President BAT should have audited supply chains and implemented direct crude-for-product swaps (no cash payments for Dangote and other modular refineries across Nigeria). 

Or supply crude to Dangote at subsidized rates (e.g., $50/barrel) in exchange for fixed-price PMS (e.g., ₦120/liter). This cuts import costs. Then cut the federal loan burden by increase in production rather than using proxies to acquire numerous oil majors within 1 year and 8 months. Renegotiate the loans we are paying, to make life easier for Nigerians. 

PH Refinery has been revived; why not use subsidies to fund capacity expansion (e.g., modular refineries) rather than imports? 

Do you know that cost of crude oil today is the same in 2021? $70/barrel/(₦97/ a liter petrol) and is $80 today. The difference is:Exchange rate collapse (₦400/₦1,579). Another IMF supposition that makes no good impact. 

Nigeria’s subsidy leaks stem from porous borders. Who left the border porous? Unpatriotic government workers. Use central drones to checkmate their activities.Neighboring countries buy Nigerian petrol at ₦600/liter while Nigerians pay ₦1,200. Tightening borders (e.g., via tech-driven surveillance) would solve the problem. 

Nigeria has to subsidize domestic refining to break the import/forex doom loop. This is because the IMF’s "subsidy removal = lower inflation" dogma ignores Nigeria’s reality. We know that over here fuel prices feed into transport, food, and production costs. A 200% price hike (₦120-₦900) in 2023 caused inflation to spike to 28%.

SMEs (60% of GDP) rely on affordable fuel. Removing subsidies kills jobs. Today, small businesses can't even survive again. You can't run a common poultry if you are not ready to inflate the price of your chicken. Feed is high, labor is high, charcoal is high, power is high. Insecurity is on the rise. 

Finally, Bola Ahmed Tinubu should redirect subsidies from imports to domestic refining. 

Eliminate middlemen via regulated crude-for-product exchanges.

Secure borders to prevent smuggling.

Stabilize forex by reducing fuel imports (saving $10B/year).

Subsidy removal is economic suicide for an oil-rich nation with no social safety nets. Reform is the only viable path.

Thank you.