CPPE backs fuel relief, rejects return to petrol subsidy

The Centre for the Promotion of Private Enterprise has defended the Federal Government’s temporary fuel price relief initiative through the Nigerian National Petroleum Company Limited, arguing that the intervention should not be interpreted as a reversal of the petrol subsidy removal policy.

The organisation said the recent increase in petroleum product prices was largely driven by developments in the global energy market, particularly geopolitical tensions that had pushed crude oil prices above $100 per barrel, rather than by Nigeria’s decision to remove petrol subsidies.

In a policy brief issued on Tuesday, the Chief Executive Officer of CPPE, Dr Muda Yusuf, said governments could introduce temporary measures to protect households and businesses from exceptional economic shocks without abandoning broader economic reforms.

“Economic policies are instruments for promoting citizens’ welfare; they should not become rigid doctrines that prevent governments from responding to exceptional social and economic difficulties,” Yusuf said.

He argued that the current intervention differed from the former subsidy regime in its scale, scope and implications for public finances, adding that a limited relief programme did not necessarily amount to a return to government-controlled petrol pricing.

• Gas pipeline: Host communities give NNPCL, PINL two-week ultimatum over unpaid allowances
• 2027: Agbakoba urges presidential candidates to state positions on petrol pricing
• Oyedele’s smart but lacks right education for economic reforms – Bolaji Abdullahi 

The debate comes as rising energy costs place additional pressure on household budgets and business operating expenses, with increases in fuel prices affecting transportation, food distribution, agricultural production and the cost of delivering goods and services.

Nigeria removed its longstanding petrol subsidy in May 2023, a major economic reform intended to reduce the government’s financial burden and free up resources for other priorities. The policy also exposed consumers and businesses to greater fluctuations in domestic petrol prices, including those arising from movements in international oil prices and exchange rates.

The latest intervention has therefore raised questions about how the government can cushion the effects of higher fuel prices without recreating the fiscal pressures associated with the previous subsidy arrangement.

Yusuf said the scale of the current intervention was substantially smaller than that of the former subsidy programme, under which the government effectively bore part of the cost of nationwide petrol consumption.

All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH.