By Abdulmumin Giwa
The recent adoption of the new policy withdrawing fuel subsidy as contained in the Petroleum Act 2023 by the President Bola Ahmed Tinubu has raised a lot of eyebrows across the country.
A situation which has led to the increase on the pump price of petrol per liter to a newly announced rate by the NNPCL of N500 per liter.
Considering the rate of corruption encouraged and supported by the payment of petroleum subsidy, withdrawal of the subsidy becomes pertinent and must be supported and encouraged by Nigerians.
Yes, it will not be without swallowing some bitter pills, but the Nigerian government on its side must complete the revolution by raising the standard of living of the ordinary Nigerian to balance the equation.
Nigeria is one of the few countries in the world where the pump price of petrol is very cheap, not because it is an oil producing country, but because the government gives $10 billion to importers of the product in the name of subsidy.
The new non subsidy petroleum regime currently embarked upon, that is supported by law, for which subsidy has not been provided for in the budget inherited by the new government, will only create additional poverty in the country if nothing is done to reciprocate the effects. It is practically clear that as the level of expenditure increases for the common man, and the rate of income remains the same, definitely the rate of poverty increases to the brim.
With the rise in price of petrol in Nigeria, transportation, food, services and other essentials including healthcare and education will increase. There is going to be a massive inflation in the country.
Hence, what Nigerians need to do, from both the private and the public sectors is to ensure the creation of a new minimum wage scheme that is three times more than the current one.
From the N30,000 minimum wage, it must be increased to nothing less than N90,000 for both the private and public sectors and supported by law to avoid enslaving the citizens and putting them in extreme hardship.
When you compare Nigeria’s situation and the rate at which people buy petrol in other countries and what they earn as minimum wage, you will realize that Nigerians are being enslaved by the system. They are institutionally impoverished.
For example, I made an analysis on the pump price of petrol and the minimum wage paid to workers in some selected countries only to realize that Nigeria should settle for nothing less than N90,000 for both private and public sectors to manage their lives or else the institutional poverty rate will rise beyond expectation.
When poverty increases, the rate of crime and insecurity will surely increase and will create a state of anarchy in the country.
The pump price of petrol per liter in the US is N466.5 per liter but the monthly minimum wage calculated from hourly rates received by workers is N2,872,030 per month.
In Iran where the pump price per liter appears to be cheaper as a leading oil producing country, petrol is sold at N165.0 per liter, but the monthly minimum wage of a worker is N648,166.
In Russia, the pump price of petrol per liter is N299.0 and workers receive N105,108 as minimum wage monthly.
Germany on the other hand, sells petrol at N894.3 per liter and pays it’s workers a monthly minimum wage of N948,247 to balance the effects.
In UK, petrol is sold at N821.6 per liter and the minimum wage is N939,518 while also in France the pump price of petrol per liter is N912.8 but workers receive N691,500 as minimum wage.
When it comes to Nigeria, one wonders whether workers are paid at all. If the pump price of petrol will now be N500.0 per liter, there is no reason why Nigerians should accept and live on a minimum wage of N30,000 monthly. This is enslavement and must be challenged.
Just as the government has inherited the withdrawal of subsidy, it should increase the basic income of Nigerians in both public and private sectors and support it by law to avoid instituting anarchy and to tame the effects of the abrupt inflation that is put in place.
As subsidy is withdrawn, the subsidy money should be used in paying workers more monthly income to be able to survive the pains of inflation that comes with it.
In as much as we operate on the global economy, we should also consider our own local economy and how it thrives and we should consider our people and how they survive.
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