The Center for the Promotion of Private Enterprise (CPPE) has called on the Federal Government to quickly implement targeted measures to lessen the impact of rising gasoline prices on households and businesses nationwide.
The CPPE stated that these interventions should focus on transportation, logistics, electricity, food security, healthcare, education, and social protection. They argue that providing targeted support is more effective and sustainable than reinstating a universal fuel subsidy.
This recommendation was included in a policy brief released on Sunday by CPPE's CEO, Dr. Muda Yusuf, following the recent hike in petrol prices from ₦1,300 to ₦1,430.
Yusuf acknowledged that the latest increase would put more pressure on consumers and businesses but maintained that restoring the fuel subsidy would reverse reforms and strain government finances further.
He emphasized that instead, the government should ensure that the funds saved from removing the subsidy lead to real benefits for citizens, such as improved infrastructure and public services.
“Citizens must see tangible benefits through improved public transportation, electricity, healthcare, education, food security, infrastructure, and social protection,” he said.
According to Yusuf, the debate over fuel subsidies should now shift from their reinstatement to fiscal accountability and the proper use of resources generated by the reform.
“The issue is increasingly one of fiscal responsibility and spending quality. Federal, state, and local governments must transparently show how the additional funds from the reform are improving economic and social outcomes,” he added.
Yusuf urged increased investments in mass transit, affordable public transportation, rail freight infrastructure, and logistics networks to cut transportation costs and help moderate inflation.
He also called for faster deployment of Compressed Natural Gas (CNG), solar energy, and other distributed energy solutions to reduce households' and businesses' dependence on petrol-powered energy sources.
Further, he recommended targeted support for vulnerable households and productive enterprises, especially micro, small, and medium-sized businesses (MSMEs), which are facing rising operating costs.
He advocated measures to lower energy, logistics, and financing costs to make businesses more competitive and sustain economic activity.
On food security, Yusuf urged the government to boost investments in irrigation, rural infrastructure, agricultural logistics, and other productivity-enhancing initiatives to increase domestic food production and curb food inflation.
He stated that all levels of government should share responsibility in implementing measures to mitigate the impact of rising petrol prices.
“The CPPE recognizes that the current increase in petrol prices presents serious challenges to living costs, inflation, and competitiveness requiring urgent action.
“However, restoring the pre-reform universal subsidy regime is neither fiscally sustainable nor economically sensible. The right approach is to maintain the downstream petroleum reforms while actively addressing their social and economic costs.”
Yusuf also called for greater transparency in managing the additional revenues collected by federal, state, and local governments following subsidy removal.
He said making the benefits of the reform more visible through improved infrastructure, better public services, and productive investments would help build public trust.
He noted that the national debate should move beyond whether to restore fuel subsidies and focus on converting reform gains into lasting economic benefits.
“The more important issue is how Nigeria can turn the benefits of reform into lower structural costs, stronger domestic production, better competitiveness, increased energy security, and measurable improvements in citizens’ welfare.
That is the pathway to making the reform economically sustainable and socially acceptable,” he stated.
The position of the CPPE comes amid renewed discussions about the economic and social impacts of removing fuel subsidies, especially as rising petrol prices continue to affect transportation, business operations, and household expenses.
Last month, Zacch Adedeji, Chairman of the Nigeria Revenue Service (NRS), said Nigeria’s fuel subsidy bill could have risen to about ₦53 trillion, with the naira potentially weakening to around ₦3,500 to the dollar, if the subsidy regime had been maintained.
In an interview on Channels Television, Adedeji explained that the subsidy was unsustainable because the government was effectively borrowing money to buy petrol at higher prices before selling it below cost to consumers.
He argued that keeping the subsidy would have placed severe pressure on public finances and increased the country’s fiscal risks.
President Bola Tinubu has repeatedly defended the removal of the petrol subsidy, calling it necessary to prevent a fiscal crisis and restore macroeconomic stability.
Tinubu stated that the reform freed up government resources for development priorities and laid the groundwork for broader economic reforms, though Nigerians still face short-term impacts like higher transportation and living costs.
He also pointed to improvements in sectors such as agriculture as evidence of the long-term benefits of the reform program.
Post a Comment