Barely a week after the formal announcement of the removal of the petroleum subsidy by the President, Asiwaju Bola Ahmed Tinubu, Nigerians have started living with the reality and assessing its full benefits.

The pall of uncertainty that followed the inaugural day declaration have since palled away, giving rise to total optimism.
While the President gave a hint of hope when he told the APC Governors that the present N30,000 minimum wage for civil servants would be reviewed upwards, many State Governors have started working out palliatives for the people of their States.

While the petroleum products markets panickily responded arbitrarily to the announcement by outrightly jerking up the pump, closure of sales, and hoarding in some instance, the various strategic moves of the Federal Government eased off the tension created by the panic responses to the stoppage.
After years of dilly-dally by successive administrations, President Bola Ahmed Tinubu found the exceptional courage to announce the full removal of subsidy payments on the popular Premium Motor Spirit (PMS).
Subsidy payments on petroleum fuel has been digging a huge hole in the nation’s economy since the regime of the Military President, General Ibrahim Badamasi Babangida(Retd). The government has shut down all the four refineries in the country, (two in Port Harcourt, Rivers State, one in Warri, Delta State and one in Kaduna, Kaduna State) for a proposed Turn Around Maintenance (TAM). And to meet the local consumption, the government issued licences to the Nigerian National Petroleum Corporation (NNPC) and some others called independent marketers to import fuel. And from there, the regime of subsidy started.

Successive administrations have mulled the stoppage of subsidy regime, but mostly lacking the political will to do so. The nation have heard of several partial withdrawal several times, thus creating mistrusts and confusing in the administration of the subsidy payments.
Regime of heavy subsidies on petroleum products and power have driven some countries into economic perdition. The government due to IMF anf World Bank’s advice had earlier removed subsidies on kerosine and diesel oil, while that of power was removed some two years ago. Angola too is toiling the route. The country, like Nigeria, Angola too has cuts petrol subsidy ‘to promote economic growth’
To further ameliorate the impact on the populace, the Federal House of Representatives has urged the FG to provide gas-powered buses across the country to mitigate effect of petrol subsidy crisis
Also, a former President of the NLC and also Governor of Edo State, Adams Oshiomhole is however optimistic that the President, Bola Tinubu will pull through, as he has an immediate solution to cushion the consequential effect of the subsidy removal.
The former governor expressed confidence that issues arising from the removal of fuel subsidy will be quickly resolved between the Federal Government and the organized labour.

Oshiomole, now a Senator elect, stated, while speaking in an interview with Channels Television’s Sunday Politics, that Tinubu recognizes the impact the withdrawal of fuel subsidy is having on Nigerians and is determined to take immediate action to cushion it.
He said, “This president recognizes that the effect of the withdrawal is already here, people are already going through some level of discomfort and therefore there has to be an immediate solution to it.
“Now that immediate solution is what we discussed and the fact that we are meeting on Tuesday again shows that clearly, we realize that this is not one of those things you want to buy time because it has a real negative impact, on particularly, the most vulnerable group.
“But we have a solution to it because you are going to make savings, so take from that savings or even if it is borrowing.
“So, whatever it is, you can leverage some revenue and improve wages to cushion the cost of living, I think it is legitimate, I think it is doable, it is not something that you want to spend two to three months negotiating,” he said.
Oshiomole, who is a former president of the Nigeria Labour Congress (NUC), was part of a meeting between the Federal Government and the Trade Union Congress (TUC) between Sunday and late Monday (5 June 2023) evening.
He disclosed that the meetings were productive, adding that the government will consider all the demands by the TUC and revert on Tuesday.
Oshiomole said if Nigeria can save about N7 trillion by ending subsidy, the Federal Government can take part of that money and put in the wage sector.

He said, “This is possible because those savings will go into the federation account which will be distributed among the three tiers of government and so every tier of government will have more money and should be able to meet the consequential increase in wages.”
Also, one of the big four consulting firms in the world, PricewaterhouseCoopers,has identified post-subsidy palliatives that the Federal Government can implement to mitigate the effect of the petrol subsidy removal.
In its recent report, titled, ‘Fuel Subsidy in Nigeria — Issues, Challenges, and the Way Forward’, PwC said minimum wage increase, high tax exemption, and the provision of foreign exchange (FX) to importers of diesel, can help curtail the shocks of subsidy removal.
Proposing possible remedies to the subsidy removal crisis, PwC asked the federal government to fully deregulate the downstream sector and completely stop the under-recovery payments.
The company also backing the government’s decision to scrap subsidy on petrol, suggested the provision of credible, evidence-based palliatives.
“It is not the poorest people in villages that will be most impacted as they normally have very limited touch points with petrol consumption (they move around by trekking or using bicycles to their farms, shops, and market with only a very few owning motorcycles or vehicles),” the report reads.
“The recommended palliatives are an increase in the minimum wage — this will ensure that there is support by workers and limit the resistance by the labour union.
“Increase in the monthly income threshold for PAYE exemption purposes — currently N30,000 per month is exempted from PAYE which can be increased to at least N50,000 per month. This will give extra cash to the employed poor on a monthly basis to cushion the impact of subsidy removal on them. Also, small business owners will benefit by way of higher tax exemption on their equivalent profits for direct assessment.”
The firm also said the government should guarantee the provision of foreign exchange (FX) to importers of diesel at “the official exchange rate using the FX savings from the current fictitious petrol consumption that will be eliminated when the subsidy is removed”.
This, PwC said, would bring the pump price of diesel down significantly and in turn moderate the inflationary impact of the petrol price increase.
While the minimum wage increase and high tax exemption threshold will affect the revenue of states, PwC said the higher revenue to be shared from subsidy savings “will more than compensate”.
“The additional benefit of this proposal is that it can be implemented within a short period of time at a manageable cost while protecting the most vulnerable population in a sustainable manner without being prone to corruption,” the consulting firm said.
Meanwhile, the country is currently experiencing post-subsidy realities after President Bola Tinubu announced that the petrol subsidy has been removed. However, with the expected coming on stream of the newly inaugurated Dangote Refinery in Lekki corridor, Lagos State, there is huge hopes that the prices of the commodity would soon drop drastically.
The Oil Producing and Exporting Countries, OPEC+ has also further extends production cuts, adjusts Nigeria’s output to 1.38m bpd to shore up the market price.

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