Nigeria on Monday announced the removal of fuel subsidies amid fears of labour unrest, a move that is bound to be unpopular among the citizens of the oil-rich nation as it may push up the prices of petroleum products.
The government of President Goodluck Jonathan said it has spent more than $8 billion on the subsidies. The money can be saved by phasing out the subsidies and can be used to help the poor.
It promised to use the amount saved from subsidy removal to improve infrastructure.
Petroleum regulatory authorities in Nigeria announced the removal of fuel subsidies which would push petroleum price upwards amid fears of labour unrest.
Long queues were seen at petrol stations as soon as the Petroleum Products Pricing Regulatory Agency (PPPRA) announced the removal while some refused to sell.
“Consumers are assured of adequate supply of quality products at prices that are competitive and non-exploitative and so there is no need for anyone to engage in panic buying or product hoarding” PPPRA said amid increased apprehension among citizens who see the fuel subsidy as the only benefit they enjoy for being an oil producing country.
The country’s Senate also said the removal was premature as consultations were still on-going.
The Senate spokesman, Enyinnaya Abaribe said such action could only be carried out when a final decision has been taken on the 2012 Appropriation Bill currently before the parliament.
The labour union criticised the removal saying the parliament has not given the process any legislative backing.
President of Trade Union Congress (TUC), Peter Esele said the government entered into a dialogue with its members last week only to turn behind and remove the subsidy.
“It is a total declaration of war on the poor masses who are being punished by an inefficient system that is anchored on few corrupt oil thieves who are major sponsors and backers of government”, he said hinting that the National Executive Council of TUC would meet in the next few days to take a firm decision on the issue.
“The Trade union Congress of Nigeria (TUC) rejects without reservation the reported removal of petroleum subsidy by the federal government as announced by the Petroleum Products Pricing Regulatory Agency (PPPRA),” he added.
Nigeria is Africa’s top oil producer with an average production of 2.4 million barrels per day.
Over 70 per cent of refined products are imported due to lack of refineries but major marketers have indicated their intention to build refineries after deregulation.