A Review of the Nigerian Energy Industry

Poll shows change in Nigerians’ position on fuel subsidy removal

Oscarline Onwuemenyi

15 September 2014, Sweetcrude, Lagos – ABUJA – There appears to be a slight improvement in the number of Nigerians who demand the removal of subsidy on petrol, even as the Federal government looks set to implement its policy to remove subsidy on petrol since an initial attempt led to widespread riots in January 2012.

Oil SpillBack in 2012, a survey carried out by a coalition of civil society organizations in the country showed that more than 87 percent of Nigerians are not in support of the plan to remove the subsidy on petroleum products. Only 13 percent of Nigerians support the government’s stance on full deregulation on the industry.

The survey, which was conducted by the Alliance for Credible Election (ACE) and the CLEEN Foundation, showed public distrust over government’s ability to manage the proceeds of the subsidy removal with many Nigerians saying that the removal will increase cost of goods and services in the country.

But a more recent survey conducted by NOI Polls Limited on the subject showed that more Nigerians may be finally getting around to the issue of fuel subsidy removal. Even though majority of the respondents (57 percent) said they are not in support of the subsidy removal, 43 percent said they are in support, showing a marked improvement over two years.

Notably, the poll revealed that the South-East zone (56 percent), accounted for the highest proportion of respondents in support of subsidy removal while the North-West (64 percent) has the majority of respondents against the petrol subsidy removal.

In spite of the continued subsidy payments to oil marketers, Nigerians across the country continue to suffer from arbitrary and indiscriminate pricing of petroleum prices, despite assurances by authorities to clamp down on marketers selling more than the official price of N97 per litre.

The Petrol Price Monitoring Polls conducted by NOIPolls Limited revealed a significant 47-point increase in the proportion of Nigerians who bought petrol above the official pump price from January (31 percent) to July, 2014 (78 percent).

More interestingly, however, the result also showed that majority of Nigerians still oppose government efforts to completely deregulate the petroleum industry and the removal of the subsidy for petroleum products.

Speaking to Sweetcrude in a recent interview, the Executive Director of CLEEN Foundation, Mr. Innocent Chukwuma, urged the Federal government to drop the plan to remove fuel subsidy, noting instead that the priority should be to reform the Nigerian National Petroleum Corporation (NNPC) and the entire oil and gas industry, and to fight illegal bunkering and corruption in the industry.

He added that, “We are asking the asking the government to also stop the illegal bunkering activities and theft of oil in the Niger Delta, and to use the savings from stopping widespread corruption in the industry to fix old refineries and build new ones.”

According to Chukwuma, “The issue of subsidy removal on petrol is a very sensitive and emotional one among Nigerians, and we felt the need to undertake a scientific approach by gauging the true feelings of Nigerians over the proposed policy.

He said the results showed that the main reason cited by respondents against subsidy removal is the belief that it will lead to increase in the prices of goods and services (69 percent), while 11 percent of respondents believed that the subsidy is “the only benefit Nigerians (as an oil producing country) have enjoyed from the government.”

Furthermore, nine percent of respondents said that petrol should be refined locally before subsidy removal is considered, therefore new refineries should be built first, existing ones be fixed and properly managed. Seven percent said that government should create jobs first, while four percent (4%) believed that government will mismanagement saving from subsidy removal through corrupt practices.

He added that, “Results of the survey showed that more than six in ten (66 percent) of the respondents were aware of the planned removal of subsidy on the price of petrol. More men (70 percent) than women (68 percent) were aware.

“With regards to awareness by region, the South–West recorded the highest awareness ratio with 76 percent, followed by the North Central and South-South (68 percent), the North-East (66 percent), North-West (60 percent) and South East (59 percent).”

Furthermore, Chukwuma noted, majority of the respondents think that Nigerians would protest the removal of subsidy on petrol through public demonstration and industrial actions.

“About 46 percent of respondents believe Nigerians would protest the removal of subsidy on petrol through public demonstrations and industrial actions or strikes, while 26 percent believe Nigerians would accept the removal passively as Nigerian people are generally peaceful and have seen/endured harsh actions taken by governments in the past.

“Only five percent of the respondents believe that removal of subsidy will be acceptable once Nigerians are convinced that saved funds would be put to good use,” he stated.

Also, in the event of a mass demonstration or industrial action, the results showed that nearly nine out of ten respondents think that security agencies in the country are not effectively equipped to handle such a situation of widespread protest or chaos resulting from the breakdown of law and order,” Chukwuma noted.

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