THE GOOD THING ABOUT FUEL SUBSIDY REMOVAL

As the government of President Muhammadu Buhari removes fuel subsidy, somebody wrote that an unreserved apology should be tendered to President Goodluck Ebele Jonathan for the opposition that greeted his removal of the same subsidy four years ago.

Now my response is that though personally I supported the subsidy removal four years ago, looking back now in retrospect, I must give kudos to the organizers of that protest against it. They probably saw into the future.

 Given what we now know was the level of looting in that administration, there is no doubt that the money that would have been saved from subsidy removal would have been looted as well.

The truth is that some of the people now opposing fuel subsidy removal are not doing so because it is a bad policy, rather they are doing so because it pains to see someone else do what their "hero" could not do. In other words, they politicize what is clearly an economic decision.

Let me repeat. Removal of fuel subsidy is perhaps the best decision the PMB administration has made yet. The subsidy regime did not benefit the poor who are supposed to be its target. It benefitted the rich, and continues to benefit the rich. Add this to the corruption that bedeviled it, and you will get the picture. The poor who are supposed to be the beneficiaries were short-changed.

Even now, we are already paying more than envisaged in an emergent no-subsidy regime. So what is the point in retaining it? What is the point in financing corruption? What is the economic sense in subsidizing consumption? The money saved from subsidy removal can be channeled to providing infrastructures.

What is more, some of the subsidized petroleum products end up in neighbouring countries. In other words, we subsidize consumption in neighbouring countries.

The good thing about this subsidy removal is that the downstream sector would eventually be fully deregulated. It will now attract investment, and we will now begin to think seriously about local solutions to our perennial energy problems. This will usher in competition and eventually push down price.

The ultimate solution to the problems bedeviling our oil and gas sector however is the passage of the Petroleum Industry Bill and its faithful implementation. Among other things, it will eliminate wastages, curb corruption in the sector, attract investment, enthrone a culture of transparency and efficiency, curb conflicts with host communities and entrench international best practices in the sector. It will, to all intents and purpose, spark off the kind of revolution that happened in our telecoms sector. And Nigerians would be the ultimate beneficiary.