A civil society organisation, Independent media and Policy Initiative, has applauded President Bola Tinubu over his decision to remove the petrol subsidy.
President Tinubu announced the withdrawal of subsidies in his inaugural speech on Monday, saying that the past administration did not make provision for such in the 2023 appropriation act.
The announcement, however, came after a severe fuel shortage that saw several petrol stations close down and others raise their pump prices in order to benefit handsomely from panicked fuel purchases.
In reaction, the group in a statement issued by Niyi Akinsiju, on Tuesday, described the president’s decision as commendable.
It said the measures, has since triggered an immediate positive outturn on PremiumMotor Spirit (PMS) consumption and related revenue earnings compared to the pre-subsidy removal regime.
“President rightly acknowledged that the fuel subsidy regime was an albatross on the nation’s economy with debilitating impact on its sustainability and by extension, a threat to the quality of life of the generality of Nigerians, if a decisive policy statement was not immediately made and enforced.
“While taking cognizance of the associated economic challenges that households are grappling with, it is our considered opinion that the decision by the President to announce the removal of fuel subsidy is not only courageous but commendable.
“More important, it was a measure to eliminate the long standing subsidy related corruption perpetrated by the cartel of the subsidy regime.
“From a policy impact point of view, the measure triggered the immediate positive outturn on PremiumMotor Spirit (PMS) consumption and related revenue earnings compared to the pre-subsidy removal regime.
The group said the decision has led to a gross revenue going into the federation account and subsequent FAAC allocation to the three tiers of government from N786.161bn in May 2023 to a high of N1.1trn in August citing that the NNPCL was no longer resorting to its famed under-recovery.
“Distinguished members of the media, you can all attest to the fact that just about a month after the announcement of the removal of fuel subsidy, national daily fuel consumption fell dramatically from an unexplainable 66.7 million litres a day as of May 2023 to 45 million litres. The consumption size has further reduced and now stabilised at 43.3 million litres a day.
“This steep reduction has led to a quantum leap in total gross revenue going into the federation account and subsequent FAAC allocation to the three tiers of government from N786.161bn in May 2023 to a high of N1.1trn in August because NNPCL was no longer resorting to its famed under-recovery.
“And for the first time in the history of FAAC, the Federal Government of Nigeria started cultivating the culture of savings from revenue accruals beginning from the over N700bn that was saved in July last year when the FAAC received the sum of N1.959 trillion.
“This has marked a turning point in Federation accruals and revenue generation with implications for budget performance.”