Page 7 - DMEA Week 03 2022

DMEA COMMENTARY DMEA

After a closed-door meeting with Buhari Traffic jam ahead?
on January 18, Ahmad Lawan, the president of As of press time, it was not at all clear how the
Nigeria’s Senate, indicated that the PMS subsidy matter was likely to be resolved. Within the
was likely to remain in place. He told reporters Buhari administration, the president himself
that he had discussed the matter with the pres- has remained silent, and Ahmed also has not
ident, expressing constituents’ concerns about responded publicly to Lawan’s statements. Some
the potential economic impact of a sudden rise Nigerian analysts and observers have com-
in gasoline prices and recounting legislators’ mented on the matter, in line with their own
worries about protests and public unrest. political leanings. However, Ahmed’s supporters
Buhari responded by expressing his own at the World Bank and the International Mone-
thoughts on the matter, Lawan said. “I’m happy tary Fund (IMF), both of which have been press-
to inform Nigerians that Mr. President never ing Abuja to eliminate the subsidy for years, on
told anyone that the petroleum subsidy should the grounds that it is burdensome and a drain on
be removed,” he declared. government revenues, have not spoken up yet,
The Senate president acknowledged the and it may take several days for them to do so.
cost of the gasoline price supports, but he also Meanwhile, concerns are growing within
emphasised that Abuja did not want to make Nigeria about the lack of political will to remove
ordinary Nigerians bear the cost of policy subsidies ahead of next year’s presidential elec-
changes. “I know and I agree that the subsidy is tions, noted Ian Simm, principal advisor at
very heavy. But I think we must never transfer consultancy IGM Energy. “This hot potato has
the burden to the citizens,” he said. been passed off between administrations, and
Rather than focusing on the subsidies, he sug- with Buhari unable to run again next year, there
gested, the government’s best option might be to appears to be more than a fair chance he won’t
investigate the matter to determine whether its risk tarnishing his reputation by tackling subsi-
generosity is being taken advantage of by smug- dies,” he told NewsBase.
glers who buy gasoline cheaply in Nigeria and Simm pointed out that Buhari’s predecessor
sell it for higher prices across the border. He President Goodluck Jonathan had removed
referred to the gap between government data subsidies 10 years ago this month, more than
suggesting that the country consumes about doubling fuel prices, only to reinstate artificial
50mn litres per day of gasoline and data from the pricing just two weeks later amid widespread
national oil company (NOC), Nigerian National civil unrest. “The trouble is, nobody will get
Petroleum Corp. (NNPC), that shows the figure voted in on a mandate of subsidy removal, and
to be about twice as high. anyone who enacts such a move may not last
“We need to look at this critically and see how long in office,” he commented.
we can find the truth because I am not convinced All in all, this episode should serve as a
that within the boundaries of Nigeria we are con- reminder that the PIA per se is not going to be
suming 100mn litres [per day]. Probably neigh- enough to remove all the obstacles to the smooth
bouring countries may be benefiting from this. functioning of Nigeria’s oil and gas industry. The
Can’t we do something about it? It is a failure on industry is going to encounter some bumps and
us if we are not able to control it, this particular potholes during its journey down this road, and
aspect of smuggling of the petrol, and then in it looks like one of its first major traffic jams may
return push the burden to the ordinary citizen.” lie just ahead.™

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