Removing fuel subsidies: the politics of accountability

I remember the Petroleum Trust Fund (PTF), established in the aftermath of the 1993 fuel price hike, when the price of petrol rose from about N3.50 to N8.50 per litre. The justification was that the additional revenue would be channeled towards critical infrastructure and national development. Then came 2012. The Goodluck Jonathan administration introduced the Subsidy Reinvestment and Accountability Program (SURE-P), again as part of the justification for reducing or eliminating fuel subsidies.

At the time of the introduction of SURE-P, the price of petrol had already increased many times from the N8.50 level of the previous period. Yet Nigerians were once again told that eliminating subsidies would free up development resources and improve the economy. The question is therefore not simply: should fuel subsidies be eliminated? The bigger question is: How many times will Nigerians pay the price of eliminating subsidies, and how many times will they be asked to wait to get the promised benefits?

Nigeria has gone through several rounds of fuel price reforms. NEITI’s analysis of political history identifies repeated attempts in 1993, 2012, 2016 and 2020, with governments adopting different mechanisms to reduce or eliminate subsidies. It is also noted that the 1993 and 2012 reforms were accompanied by the PTF and SURE-P respectively, both intended to channel revenues towards development and social interventions.

This raises a fundamental question of public policy and accountability. If eliminating subsidies is supposed to create fiscal space, where is the transparent accounting of that space? What was saved? What was reinvested? What has reached the common citizen?

For decades, the Nigerian public has been presented with different names, programs and explanations: subsidy removal, subsidy reduction, deregulation, price modulation, reinvestment and now market-based pricing. But for the ordinary Nigerian, the experience is often much simpler: the price goes up, the cost of living goes up, and another promise is made that things will eventually get better. Perhaps it is time to move beyond the politics of announcing the removal of subsidies and begin a serious dialogue on the politics of accountability.

If subsidies represent a burden on public finances, let the figures be made public. If its removal saves government money, let Nigerians see the savings. If the savings are invested in infrastructure and social protection, let Nigerians see the projects and know exactly how much has been spent.

And if the policy is truly necessary, the government must also explain why successive administrations have repeatedly used the removal of subsidies as both an economic solution and a political promise, while the fundamental problems of domestic refining, energy infrastructure, transport and mass poverty remain.

After more than three decades of debates over subsidies, perhaps the real question is no longer when subsidies will be removed. The real question is: when will Nigerians finally hear the last excuse to remove it?

Bashir Bello,

Kaduna, Kaduna State