CSJ Urges FG to Utilise 50% of Subsidy Removal Proceeds to Cushion Impact on Masses

Ndubuisi Francis in Abuja 

Amid the ongoing debate over the federal government’s offer of margin discount in Nigerian National Petroleum Company Limited’s (NNPCL) fuel stations, the Centre for Social Justice (CSJ) has argued that the price modulation mechanism that would ensure that petrol price stabilised at not more than N1,350 was below the expectations of Nigerians who desired a reasonable relief that would reduce their current hardship. 

It, instead, urged the government to utilise the proceeds of the current subsidy removal by 50 per cent annually to assuage the pains.

A statement issued by CSJ’s Lead Director, Eze Onyekpere said Nigerians were buying petrol at about N800 before the America-Israel-Iran war, adding that the expectation was that any relief measure should revert fuel price to the N800 figure with a sequenced detailed plan to further reduce the price between N400-N500 per litre in the medium term.

Following the federal government’s recent declaration of an savings of N15.8 trillion between June 2023 and December 2025, translating to N6.32 trillion a year, CSJ argued that if the government its proposed 50 per cent subsidy cut would amount to a forfeited revenue of N3.16 trillion a year. 

It argued that an expenditure or forfeited revenue of N3.16 trillion a year by all the tiers of government in Nigeria that reduced fuel prices by 50 per cent was an investment greater than any imaginary illusionary macroeconomic indicator achievement.

The group argued that a country that forfeited, and waived N34 trillion import duties in a year should also absorb N3.16 trillion expenditure to reduce the misery, suffering and hardship imposed on citizens by the full removal of fuel subsidy.

The organisation noted that the proposed margin reduction would be possible through certain measures, including setting a domestic price cap regime for crude oil, indexed on the desired official policy price per litre of different petroleum products and the Nigerian standard of living. 

This, the leading civil society organisation  said, will produce a price lower than the international price of crude oil.

It also urged the government to empirically determine the number of barrels per day needed by local refineries to satisfy Nigeria’s refined petroleum product needs, and take cognisance of the fact that crude oil produces over 21 derivatives – more than petrol, diesel, kerosene and aviation fuel.

CSJ urged the government to deliver crude oil to local refineries at the reduced price, ensure that refined products are not smuggled or diverted from Nigeria, and meticulously police the borders.

The organisation called for the concession of the four NNPC refineries to core investors with technical, financial and managerial capacity to start immediate refining of crude oil.

It further prescribed the recovery of all monies mismanaged under the pretext of turnaround maintenance of the refineries, during the late President Muhammadu Buhari’s administration.