Opeyemi Agbaje, the chief executive officer of RTC Advisory Services Limited, stated that the time is ripe for the Federal Government to remove fuel subsidy.
Opeyemi Agbaje stated that fuel subsidy removal would release N1tn per annum for investment in people, alleviating poverty, unemployment and inequality.
He explained: “The economy is paying the cost of deregulated fuel without getting the benefits of deregulation. Fuel subsidy is a middle class; consumption subsidy that is wasteful and prone to corruption. Nigeria needs to invest in the poor rather than middle class”.
The expert said the country spent N2.19tn on fuel subsidy in 2011; N1.049.6tn in 2012; N971.1bn in 2013 and N971.1bn last year.
Agbaje continued: “Spending 25 % of federal budget on importation of petrol, while Nigeria has huge crude oil and gas reserves does not make economic sense. The subsidy prevents the creation of a domestic refining and petrochemical sector through private investment.”
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The RTC Advisory Services Limited chief also added: “The inflationary effect of oil subsidy removal is a one-off economic adjustment, which is vastly outweighed by the benefits.”
He is sure that many Nigerians were now ready to accept higher oil prices in return for elimination of cycles of instability and scarcity.
“The sole factor preventing investment in domestic refineries is the oil subsidy. Full industry deregulation will produce a huge domestic, private sector, refining and petrochemical sector. This will increase the value of our exports and create jobs locally rather than subsidise foreign jobs,” Opeyemi Agbaj concluded.
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