Chief Executive Officer, Obat Oil, Akinfemiwa Akinruntan, has said ending the controversial fuel subsidy regime will make more funds available for other infrastructural projects such as roads, education, healthcare, electricity, security, and create more job for the nation’s teeming youths.
According to him, the decision by the Bola Tinubu-led Federal Government to end the subsidy regime will allow for the development of the downstream oil industry, improve Gross Domestic Product growth, combat product theft, pipeline vandalism, environmental pollution, currency shortages, as well as lead to the provision of basic amenities for Nigerians.
In an interview with The PUNCH, he said it was essential to note that payment of fuel subsidies was a liability for Nigeria.
He said, “Eliminating subsidies will free up allocations that could be spent on providing infrastructure such as roads, education, healthcare, electricity, security, job creation, downstream industry development, improve GDP growth, combat product theft, pipeline vandalism, environmental pollution, currency shortages, and provide basic benefits to the entire community. It is essential to highlight the fact that subsidies do not help Nigerians buy refined products at prices significantly below market prices.
“Perhaps the most important fundamental change, strong enough to deal with corruption and mismanagement, is less political than the economic development and growth associated with efforts to improve it. Fuel subsidies have been a growing liability for Nigeria's budget allocations for nearly four decades.”
According to him, the removal of subsidies by President Bola Tinubu was a step in the right direction.
“I support the recent removal of fuel subsidies. When it comes to fuel prices in our country, politics trumps economics. Much of the NNPC withholding is spent on fuel subsidy payments, which are prone to abuse and overspending. I believe that anyone who does not support the abolition of subsidies is the enemy of the people,” he said.
Fuel subsidies as of the last administration, had cost Nigeria the sum of N12tn.
Akinruntan said he agreed to the subsidy waiver, adding that the new cost reflective pricing nature is expected to improve product availability and attract investment in the industry as marketers now enjoy larger margins.
