Fuel subsidy is a term used to describe government policies that keep the price of gasoline or other fuels artificially low. This is typically done by providing financial support to oil companies or by imposing price controls on fuel prices. It is a policy where the government pays part of the cost of fuel to make it cheaper for consumers. This is often done where fuel costs are high or where government wants to control price of fuel for economic or political purposes. While this has made fuel more affordable for consumers, it has also led to economic distortions and cause other problems, such as excessive fuel consumption, smuggling out and diversion of petroleum products to other neighboring countries, aggregate inequality by benefitting wealthier households that consume more fuel as well as environmental damages.
The use of fuel subsidies is often controversial and has been subject of much debate in recent years. This can be trace back to the vehement opposition President Goodluck Jonathan faced in 2012 when he planned to scrap fuel subsidies. Also, the presidential flagbearer of the major political parties in the 2023 general election, capture subsidy removal in their campaign, strategically preparing Nigerians ahead of their various intended policies.
Considering the Nigeria treasury estimated cost by 2022 on subsidy which is said to be $10bn per year, you will agree with those who say, “fuel subsidy is a source of economic duress on Nigeria economy.” To World Bank, “subsidy is fiscally unsustainable and exacerbate Nigeria’s fiscal woes.” This woe culminated to why the Minister of Finance, Dr. Ngozi Okonjo-Iweala, a world renown financial expert and President Jonathan had on October 10, 2011 met with the leadership of the National Assembly at the Presidential Villa to argue their position. But their efforts were fruitless due to opposition and debate of different groups; civil liberty Organization, Labour Union, Trade Union, media outlets and the mass protest from Nigerians. Learning from that, the previous administration of Muhammadu Buhari delayed the subsidy removal deadline of June 2023 leaving it uncaptured in the budget. The basis on which Tinubu statement, “subsidy is gone” lies.
No doubt, “Tinubu is courageous to step on big toes, cabals. But, he should have refrained from putting the cart before the horse. Petrol subsidy was tainted with monumental corruption and resource distortion. It should go. But government palliatives can’t actually resolve the adverse effect of that, a sound public please policy measure will do.” Segun Adediran. This view of sound public policy measure will to a large extent help to ameliorate and cushion the effect of this subsidy on the masses if adequately plan and effectively communicated. That will definitely cut off the possiblity of having the scenario of COVID-19 palliative repeating itself.
Obviously, we feel the ripple effect of subsidy removal on every aspect as fuel price skyrocketed from #195 to #617 between May 29 and August 1. This has negatively affected the aggregate behavior of our economy and the individual economic agents of households, firms, industries as they relate to supply and demand, production cost, pricing, consumer behavior on choices, decision making as well as resources allocation. The hike in price experience at all level are offshoot of inflation brought about by the subsidy removal.
However, we cannot continue to live with the monster called subsidy while it keep creating wider gap between the rich and the poor. Haven seen its stringent effect on all aspect, it is expedient for the government to employe some level of proactiveness in mitigating it to avoid the poor from falling back on the rich when they nolonger have something to sustain them or survive by.
Although, the subsidy removal has resulted to increase fuel prices, inflation, public discontent, low consumption or demand for fuel, mitigating these negative effects requires careful planning and implementation. Fortunately for us, Tinubu, in his national broadcast on 31st July 2023 covers lots of areas Nigerians crave for government immediate intervention and action. Inspite of the president fascinating speech on plans to roll out incentives and provisions of policies and measures like agricultural value chain, investment on transportation, improve rural access to roads, introduce national minimum wage among others, domestication of these policies by both subordinate government and private ventures is yet feasible. How will majority of the teaming population working under state, local government and private organization have aggregate benefit of them?
Moreso, in this pressing time, aggregate behavior of Nigeria economy call for urgent attention with government being intentional and proactive in her policy implementations. Also, to ensure the policy meet its objective on the people it’s targeted at, the government as a matter of necessity should implore the idea of effective community media relations. Because of the diversity, heterogeneity and geographic landscape, as well as the dynamic nature and disposition of her citizens, to change their attitude and perceptions of this government as being deceptive and unfair in their dealing with them, to make them once again patriotic and a compatriot Nigerian, government should build relationships with local media outlets and create goodwill and independent oversight through the opinion leaders of every group and sect across the national tier.
In conclusion, the RACE model of public relations is suggested to be employed by government and every other agencies in formulating and implementing policies and as well as in decision which directly affect the people to reduce the frosting stimulus and impulse the policy could root. The RACE model is a strategic framework commonly used in public relations to guide the planning and implemention of public relations campaigns. RACE stands for Research, Action, Communication and Evaluation. You research to understand current situation, identify opportunities and challenges and develop effective strategies. Action; ones the research is complete, you then develop a strategic plan of action. This involves setting clearer objectives, defining target audiences and determining key messages and tactics. Communication; in implementing the planned strategies and tactics, you conduct media outreach, engage with stakeholders, manager social media accounts to get people’s reaction, organizing media events by conscious creation and dissemination of press release. Evaluation is an assessment of that policy through the feedback, comments or reactions on the proposal or policy put forward. Provided this was done, it would have saved us from the hilter to we are now. Do you see from the same angle with me?
– James Samson Olorunfemi
Prince Abubakar Audu University (PAAU) Anyigba, Kogi State
