Otti backs fuel subsidy removal, says return would hurt Nigeria

File: Abia State Governor, Alex Otti.

Abia State Governor, Alex Otti, has backed the removal of fuel subsidy, saying those calling for its return do not mean well for Nigeria.

Otti stated this in an exclusive interview aired by Arise Television on Friday while discussing the economic impact of subsidy removal and his longstanding position on the policy.

The governor said he had consistently opposed subsidising fuel consumption, arguing that government support should instead be directed towards production.

“I don’t have a problem supporting production, but consumption should not be subsidised,” Otti said.

He recalled writing in support of subsidy removal during the COVID-19 pandemic in 2020, when global demand for crude oil had fallen sharply.

According to him, the period presented an opportunity for Nigeria to remove the subsidy because of the prevailing conditions in the oil market.

Otti also argued that subsidising consumption encouraged wasteful use of fuel because consumers did not bear the full cost.

“You know, as election approaches, people will be making all sorts of arguments, but removing the subsidy was the right thing to be done.

“And I don’t think anybody who is praying that subsidy returns means well for the country,” he said.

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The governor said the subsidy regime had also become susceptible to abuse, describing it as a “scam”.

He explained that when fuel consumption was effectively subsidised, motorists had less incentive to limit their usage.

“So if you are being subsidised, you can just blast all vehicles, maybe 20 vehicles, you put all of them on the road because somebody is paying for it,” he said.

Otti acknowledged that subsidy removal would initially impose hardship on Nigerians but maintained that the policy was necessary.

“There will be the pain initially,” he said.

President Bola Tinubu announced the removal of the petrol subsidy on May 29, 2023, shortly after assuming office, ending a system under which the government absorbed part of the cost of petrol to keep pump prices lower for consumers.

The policy triggered a sharp increase in petrol prices and contributed to higher living costs.

However, successive government measures have sought to cushion the impact of the reform.

Calls for a return to subsidy have continued to feature in public debate as Nigerians contend with the effects of higher fuel and transport costs.