Economic researchers at the Centre for the Study of Economies of Africa (CSEA), one of the leading economic research and consulting services firm with focus on developments in African economies, has advised the Federal Government to adopt short and long-terms measures to mitigate the impact of the recent fuel subsidy removal policy on ordinary Nigerians.
The researchers, in the firm’s ‘Nigeria Economic Update Issue 30’ sourced by our correspondent, stated that removal of the subsidy payment on petrol had generated both opportunities and challenges for the Nigerian economy.
The experts noted that the recent removal of the subsidy payment on Premium Motor Spirit (PMS/Petrol) had significantly increased petrol prices as evidenced by the latest report by the National Bureau of Statistics (NBS), which reflected that the price of petrol surged from N238.11 in May to N545.83 in June, reflecting a staggering rise of 129.23%.
The NBS’ report showed regional differences in petrol prices, with the Northern region, on average, experiencing slightly higher prices compared to the Southern region.
Specifically, the report reflected that the North Central, North East, and North West regions reported average petrol prices of N542.73, N557.03, and N549.90, respectively
The CSEA analysts pointed out that while this policy move was seen as a step in the right direction to address fiscal concerns, it also had the potential to trigger inflation and negatively impact the welfare of the average Nigerian citizen.
On options for the government to mitigate the negative impact of the measure, the CSEA experts advocated: “A combination of short-term and long-term policy measures is essential to address these challenges. In the short term, the government could consider providing palliative measures to cushion the impact of rising petrol prices.
“One such step could involve the provision of public buses to enhance affordable transportation options for citizens. In the long term, revitalizing the existing moribund refineries and promoting local production of petroleum products can play a significant role in reducing dependence on imported fuel and stabilizing prices”, the analysts added.
