The former Governor of Lagos State said for almost three decades, the country had entertained distortions in the downstream oil sector by operating an opaque system susceptible to manipulations and structured in a way that allowed a few people to gain mightily from the system and feed fat on the misery and frustration of millions of Nigerians.
Tinubu said this on Thursday in a statement entitled, ‘Ending price fixing, the making of economic sense’.
He said it was understandable that the new pricing decision elicited mixed reactions from a cross-section of Nigerians as fuel subsidy had been with the nation for such a long period that it seemed an integral part of the country’s political and economic life.
“However, we should not lament the departure of something just because of its longevity, particularly, when that very policy had ceased to serve us long ago,” he stated.
The APC leader said the decision to end the subsidy was hard but inevitable, adding that it had transformed into a system where wrongdoers benefitted at the expense of the innocent.
“The bogus supplier was paid for supplying nothing, while you sweated in long queues for fuel that was never there. The smuggler secreted fuel across the border, while our economy crossed the border into fuel scarcity,” he added.
Tinubu said as the price stayed fixed at a low level, investors were apprehensive about fixing existing or building new refineries, and the petrochemical industry remained unfertilised because potential investors could not decipher how they could make a decent return under such a pricing regime.
According to him, because of these imbalances, the nation was forced to export hard currency and many jobs to purchase fuel and other products abroad.
He said, “While the price of fuel was cheap on paper, these were the hidden costs that made the subsidy regime an expensive and heavy yoke that the nation could not continue. With dwindling revenue from oil due to the slump in global oil prices and a dwindling forex reserve, the country could no longer live in denial.
“President (Muhammadu) Buhari, after carefully weighing the options, decided to do what is right. In an act of courage, he removed the oil subsidy, thereby freeing the downstream component of this strategic sector of the economy from the distortions of price fixing.”
The APC leader, however, stated that the decision should not be a step towards conservative austerity as practiced by the former government, which he said simply wanted to end the programme to “prove obedient to neoliberal economic doctrines.”
“They offered no programmes of valid compensation to the people. Instead, they instigated a policy of monumental fraud known as SURE-P. However, the only thing sure about it was that its architects would siphon the public’s funds to fatten their own wallets. They wanted to save money (for themselves) yet exploited the people for no good reason at all,” he added.
Tinubu said the Buhari government took a vastly different approach, adding, “Given the inefficiencies inherent in the pricing regime, this administration asked the fundamental question: could this money be better spent to help the most vulnerable of our people?
“For it was also recognised that the pricing regime was a regressive feature. Its benefit went disproportionately to the rich who needed no such help. Better to use the sums to more directly and exclusively assist the poor and working class Nigerians.”
He said Buhari followed through with a N500bn fund to support a social safety programme and empower the poor and needy, adding that five million school children would be fed for 200 days, among other plans of funding social infrastructure, education, transportation, health and other critical areas needing attention.
The APC leader stated, “What the President did is about the future of our country and that of the next generation. This government is transferring the funds to better spend them and better save the people.
“Nothing in this world is perfect but this decision is a just and correct one aimed at bolstering the economy, while caring better for those the system has unfairly treated.”
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