An economist, Dr Samson Simon, has called for stronger social protection measures to cushion Nigerians from the economic impact of fuel subsidy removal under the Bola Tinubu administration.
Simon, Chief Economist of ARKK Economics & Data Limited, said the decision to end the subsidy was not inherently wrong, noting that he had previously supported the policy because of the large public resources committed to subsidising petrol.
However, he argued that the relief measures introduced alongside the reform have not kept pace with the increase in living costs.
Speaking with journalists Simon said the benefits of increased government revenue should be assessed in real terms rather than by looking solely at the naira value of allocations shared through the Federation Account Allocation Committee.
He explained that the depreciation of the naira has significantly increased the naira value of dollar-denominated revenue without necessarily translating into equivalent purchasing power for governments or citizens.
According to him, $1 billion that was equivalent to about N460 billion before the current administration is now worth more than N1.3 trillion at the official exchange rate.
Simon also linked the increase in petrol prices to higher transportation and production costs, which he said have fed into the prices of food and other essential goods.
He disagreed with the argument that subsidy removal primarily affected wealthy Nigerians because they consumed more petrol, pointing out that poorer households are also exposed to the indirect effects through higher transport fares and the rising cost of goods and services.
The economist further warned that the effects extend to agriculture, where farmers rely on petrol and other petroleum products to operate irrigation equipment and machinery.
He said salaried workers, professionals and other Nigerians who depend heavily on public and private transportation are similarly facing increased expenses.
Simon, however, ruled out a return to the previous subsidy arrangement as the preferred solution, arguing that subsidising petrol at current economic conditions would impose a significant burden on government finances.
He said the focus should instead be on strengthening targeted interventions for vulnerable households and improving social protection programmes.
Simon also urged the government to ensure that savings and additional revenue associated with the subsidy reform translate into tangible improvements in education, healthcare, infrastructure and other public services.
