News / Africa

Nigerian President Defends Cutting $7.5 Billion Fuel Subsidy

Nigeria says it is ending a $7.5 billion consumer fuel subsidy because it can better spend that money on infrastructure and social programs. 

Nigerian President Goodluck Jonathan is moving to end a long-standing subsidy that keeps petroleum prices here an artificially low 40 cents per liter.

Raising consumer prices is never popular, but the president enjoys the support of foreign donors, many bankers and Nigeria's powerful state governors.  He says the action is vital to the country's economic future because continuing the subsidy means that Africa's largest oil producer will find itself importing fuel from Cameroon, Ghana, Chad and Niger.

“In the quest for a better society, we may have to take decisions which would, at inception, be unpleasant in some cases. But we must face the reality, be honest with ourselves and ensure that we do our best for our country at all times,” said Jonathan.

Representative Dakuku Peterside chairs the House Committee on Petroleum Resources.  He says the money saved from the subsidy will benefit Nigerians by increasing spending on roads, health care and power generation.

“It makes business sense to me that the subsidies are removed. It might not look popular today, but over time our people will appreciate that it makes a lot of economic sense. If you look at the statistics, ultimately it will benefit the common man," noted Peterside.

Proponents of dropping the subsidy say it mostly benefits the small group of fuel traders to whom it is paid. Because Nigeria refines less than one-third of the petroleum it consumes, those dealers control the importation of fuel to keep prices at the pump at 65 Naira per liter.

Borno State Senator Mohammed Ali Ndume says profiteering by fuel traders must be stopped, but not at the expense of Nigerian consumers.

“I agree with the government that right now it is a window of corruption that benefits the cabal, as they call it.  But we are saying government should be responsible.  Get those people and deal with them.  You can't just transfer responsibility of corruption and mismanagement by a few individuals to Nigerians," said Ndume. "That is wrong."

Economist Prince Ohini says removing the fuel subsidy is right in theory, but here is wrong in practice because of Nigeria's long history of corruption and mismanagement.

“The long-term effect of it is going to be beneficial for me and you as citizens of this country. But using Nigeria as a case study I will not support it because our government is not sincere.  When you remove this money, who will use it?  Removing it is enriching the bank accounts of those at the top," Ohini said. "And leaving the ordinary ones to suffer.”

At a time when trade unions have just won a hard-fought increase in the minimum wage, businessman Andrew Adebisi says ending the fuel subsidy will push up consumer prices across the board, erasing the gains of higher wages.

“If the fuel subsidy is removed, it is going to be of great effect to my business and every other business person around the nation," Adebisi said. "Definitely the fuel of transportation will increase.  And, if the fuel of moving goods from one point to another is increased, you will definitely have an increase in every other commodity around the country.  And, as a result, business will become very expensive.”

Teacher Nelson Aguda says Nigerians would be more willing to live without subsidized fuel if they felt their government was doing more to help them.

“Since I was born in this country, I have never seen any price that has gone up coming down.  It can never be maintained in this country because our leaders are very, very greedy.  I use fuel to generate my generator, my lights.  And, when such thing is removed it means that the liter of fuel might go to 150 [Naira].  How then do I get light with my family?” he asked.

Senator Ndume says the fuel subsidy is one of the few things that benefit all Nigerians, especially in places where the federal government has little impact on people's lives.

“There are some villages where there are no hospitals, there are no roads, there is no police, no government presence.  The only government presence is that in such small villages you have small grinding machines that grind their corn, which uses the petroleum.  They have motorcycles that transport them to the urban areas.  There are pick-up vehicles that take their farm products from the villages," Ndume explained. "It is the only thing that the masses are benefiting.”

President Jonathan says he will not back down from ending the fuel subsidy.  He is moving to improve the public perception of the decision by shifting responsibility for the communication strategy from the finance ministry to the petroleum resources ministry.

You May Like

Philippines, Muslim Rebels Try to Salvage Peace Pact

Peace process faces major setback after botched military operation to find terrorists results in bloody gunbattle between government forces, Moro Islamic Liberation Front fighters More

Republicans Expect Long, Expensive Presidential Battle

Political strategist says eventual winner will be one who can put together strongest coalition of various conservative groups that make up Republican Party More

Video New Wheelchair Is Easier to Use, Increases Mobility

Engineers have come up with a lever-operated design that makes use of easily accessible bicycle technology More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Islamic State Prisoners Talk of Curiosity, God, Regreti
X
Zana Omer
March 28, 2015 1:19 AM
The Islamic State fighter, a prisoner of Kurdish YPG forces, asked his family asking for forgiveness: "I destroyed myself and I destroyed them along with me." The Syrian youth was one of two detainees who spoke to VOA’s Kurdish Service about the path they chose; their names have been changed and identifying details obscured. VOA's Zana Omer reports.
Video

Video Islamic State Prisoners Talk of Curiosity, God, Regret

The Islamic State fighter, a prisoner of Kurdish YPG forces, asked his family asking for forgiveness: "I destroyed myself and I destroyed them along with me." The Syrian youth was one of two detainees who spoke to VOA’s Kurdish Service about the path they chose; their names have been changed and identifying details obscured. VOA's Zana Omer reports.
Video

Video Germanwings Findings Raise Issue of Psychological Testing for Pilots

More is being discovered about the co-pilot in the crash of Germanwings Flight 9525 in the French Alps. Investigators say he was hiding a medical condition, raising questions about the mental qualifications of pilots. VOA's Carolyn Presutti reports.
Video

Video Hi-tech Motorbike Helmet's Goal: Improve Road Safety

In cities with heavily congested traffic, people can get around much faster on a motorcycle than in a car. But a rider who is not sure of his route may have to stop to look at the map or consult a GPS. A Russian start-up company is working to make navigation easier for motorcyclists. Designers at Moscow-based LiveMap are developing a smart helmet with a built-in navigation system, head-mounted display and voice recognition. Zlatica Hoke has more.
Video

Video New Wheelchair Is Easier to Use, Increases Mobility

Traditional push-rim wheelchairs create a lot of stress for arm, shoulder and neck muscles and joints. A redesigned chair, based on readily available bicycle technology, radically increases mobility while reducing the physical effort. VOA’s George Putic reports.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.
Video

Video Virginia Tavern Takes Patrons Back to Medieval Times

European martial arts are not widely practiced and are unknown by most people. A tavern in Old Town Alexandria, outside Washington, wants to change this by promoting these fighting techniques from medieval times. Through combining visual arts, martial arts and culinary arts, this tavern brings medieval history back to life. VOA's Yang Lin and Helen Wu report.
Video

Video Space Program Status Disappoints 'Last Man on the Moon'

One of the films that drew big crowds last week at the annual South by Southwest festival in Austin, Texas, tells the story of the last human being to stand on the moon, U.S. astronaut Eugene Cernan. It has been 42 years since Cernan returned from the moon and he laments that no one else has gone there since. VOA’s Greg Flakus reports.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More