Municipal rail system, electricity will help cushion burden of subsidy removal – Analyst

Municipal rail system, electricity will help cushion burden of subsidy removal – Analyst

Story from Vivian DANIEL, Abuja

Amid issues surrounding the removal of fuel subsidy by President Bola Ahmed Tinubu during his inaugural speech on May 29, 2023, a political economist, development analyst and columnist Adefolarin Olamilekan has said that the municipal railway system and sufficient hours of uninterrupted electricity supply are the two most effective “palliative” the Nigerian government can provide for the masses.

Olamilekan said these during a radio programme called TownHall, on Saturday, June 3rd, 2023, at Rhythm94.7fm, Abuja, while expatiating on the subject matter of “subsidy, its removal and the way forward.”

In explaining what subsidy is all about, Adefolarin said, “Subsidy is all about subsidisation of a product that is supposed to be sold at a higher price to a lower price. It is the Federal Government bearing some burden or part of the cost of petrol or other products so that the citizens won’t have to bear it all.

“Moreso, it is likened to a pension contribution where the government or an employer pays a certain percentage while the worker pays as well. Because Nigeria’s refineries are not working – we cannot produce nor refine the PMS, it has perpetually made the government through NNPCL depend on the importation of Petrol, so, it became difficult for the citizens to bear the cost alone, which was where the government stepped in to subsidise the product, reason Nigerians have been buying it at a cheaper rate before now.”

It should be recalled that the House of Representatives on June 1st, 2023, demanded palliatives and measures like an alternative transport system with cheaper fuel consumption to cushion the effect of the latest development on Nigerians, along with many experts who have continued to follow the same line of thoughts.

Responding to that, Adefolarin said “Only two things that can solve the problem. The third thing people are proposing but I won’t support is those calling for palliative. The first thing I think the federal government can do is to see how we can resuscitate our rail system, municipal rail system.

“We need it to be back on board. FCT-Abuja has one that was abandoned. We need to bring back that rail system because the major hit in this subsidy issue is transportation. How can we reduce the cost of transportation among the people.

“I won’t support that we should go and be buying buses because the ones that we bought in 2012 we can’t find them. The ones that were bought just last year, early last year by the federal government for civil service in Abuja and other states, you can’t find those buses at all. Those are palliative buses. Some people are suggesting but we don’t want that. Let us see how they can tackle the municipal rail system; we need it back on board. That is the fastest suggestion for this challenge.

“Then, the second is electricity. Why many seem to be complaining about this fuel subsidy, apart from buying fuel for their cars is the cost of buying petrol for their generators at home. If electricity can be enjoyed for 18 hours, nobody will complain. And if we can have cheap and accessible transportation like municipal rail, like the ones Lagos is doing – blue rail and lots of them. There are other smaller rail systems that we can do, that can connect from Mpape to Maitama, from Maitama to Central Area, and from Central Area to Nyanya. And this can be done within 6 months. If we can go into that, it will cushion the effect of transportation and people will just mellow down, and everybody will understand that truly Government has saved money to put things in place.

“But to say that government should come and be sharing money or be buying cars, or be buying buses for some organisation, I won’t support that. That is what will consume that subsidy money that they want to save. I won’t support it. Two things, let us have accessible electricity and let the government bring back the municipal rail system into our transportation network, he added.”

On his thoughts regarding reports in March 2021 that $1.5 billion was approved for the rehabilitation of the Port Harcourt refinery; while $1.4 million were equally appropriated in August 2021 by the Federal Government to rehabilitate the Warri and Kaduna refineries, Adefolarin noted that problems like lack of maintenance culture, the ineffectiveness of the system that government operates with, lack of foresight and techniques on the part of the stakeholders, lack of transparency and accountability on the part of the government has caused a lot of damage to the Nigerian economy.

Speaking on whether NNPCL is still regulating the pump price of Petrol as lots of people assume. Adefolarin emphasised that NNPCL is not regulating the prices of the product.

“NNPC has been unbundled. Through the 2021/2022 Industrial Act, they are now a company, a government-owned company that is competing with major oil and gas enterprises like other international oil companies. What NNPCL did as soon as the declaration of President Tinubu was made was to alert the general public who comes to patronise them that the price of the product has changed. They are not regulating the price of petrol. That is why you have them selling at a particular price while others are selling at different prices,” he said.