Obi Vows To Remove Petrol Subsidy, Says $40bn Has Been Wasted

By Tosin Olatokunbo

Peter Obi, the presidential candidate of the Labour Party, LP will remove fuel subsidy if he becomes president.

While answering question from reporters in London on Tuesday Lai Mohammed, Nigeria’s minister of Information said the federal government will not removed the subsidy on petrol anytime soon.

He said the decision is part of efforts to assist many Nigerians to cope with the current economic situation, like other government across the world.

The subsidy on PMS has cost government billions of naira, and close to N4 trillion will be budgetted for it next year, the government said.

Not a few Nigerians, including the nation’s international development partners such as the World Bank, IMF have called for subsidy on petrol to be removed, to free up resources for government to develop critical infrastructure in the country.

But some have equally argued that removing subsidy and total deregulation of the product, at this moment will add to the economic problems of Nigerians particularly the poor.

Speaking on Wednesday during a live interview on Arise TV, Obi said he will remove petrol subsidy because it’s a scam. He explained that the poor are not actually benefitting from it.

He said the subsidy is a waste considering the huge amount that has been allocated in the last few years, which should have been diverted to other productive areas that can benefit Nigerians.

“We have spent over $40 billion on subsidy. Our total education expenditure in the past 10 years is about N8 trillion (about $20 billion on $400/$1). This is 50 percent of it,” Obi said.

According to him, “If we spent $20 billion in power, we would have been generating and distributing 20,000 megawatts of electricity today.

“It means subsidy alone would have solved a lot of issues in our education, health and in power. If we have 20,000mw, we will be growing at more than 4 percent and add over $100 billion to our GDP.

“Within the same period, we’ve borrowed $90 billion, which we’re servicing. With this, you could see total mismanagement of resources that could have changed the entire north… that vast land would have been huge farmland.”

“We have to study and look at it critically. Yes and No, because I would remove it, but I have to offer them what would be equivalent to what we are removing.

“Yes, I am going to use the resources to do something that would benefit, but if I am not going to do that I am not going to remove it. You must be able to offer something in replacement for what you are going to do.

“I cannot spend $40 billion on subsidy and expended 50 percent of it on education and health even security. Are you saying [petrol] subsidy is more important than the security of lives and property?

“I have been saying subsidy is a scam, and I will continue to say it. There are so many scams all over the place, including the cost of governance.”

Meanwhile, there seems no end to the scarcity of petrol across the country. Long queue of cars at petrol stations has refused to disappear, even as  marketers of the product insist that they could no longer sell at government regulated pump price of N165 per litre.

Most filling stations in Lagos and Abuja and other major cities, are now selling at N200 per litre and above. Black marketers are now having a field day selling at cut throat prices to desperate motorists.