Okumagba Hails Tinubu, Backs Subsidy Removal

A member of the Governing Board of the Niger Delta Development Commission (NDDC), Olorogun Bernard Okumagba has appealed to all Nigerians to support President Tinubu in his effort to rebuild the nation’s economy, for the benefit of all Nigerians.

Okumagba while backing the removal of fuel subsidy noted that it is in Nigeria’s interest. This was contained in a press statement dated June 1, 2023.

The former Commissioner of Finance in Delta State expressed his support for  President Bola Tinubu’s position in his inaugural speech “We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favoured the rich more than the poor. Subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.”

Okumagba claims that the 2023 Budget only included funding for the Petrol Subsidy through June 2023. Beyond June 2023, there is no funding allocated for fuel subsidies. As a result, the previous administration has already begun to phase away the subsidy on gasoline.

According to the NDDC Board member, “The truth is that the fuel subsidy regime has been a drainpipe on our resources and commonwealth. The subsidy regime created a class of corruptly wealthy businessmen and women and some public officers with whom they collude to inflate consumption figures that determine the rates of subsidy payments.”

The “Official” petroleum consumption estimates in Nigeria under the subsidy system, according to the former Delta State Commissioner of Finance, have been greatly exaggerated because they serve as the basis for calculating and disbursing subsidies to fuel importers and marketers. As a result, public dollars are going into private pockets with no return on investment.

According to Okumagba, it makes more economic sense to support manufacturing and productivity rather than individual consumption, which is what we currently do with the subsidy on petrol. However, it is preferable to subsidize consumption when it comes to necessities like public transit using buses, rivers, and railroads.

He continued by saying that the policy of fuel subsidies had, over time, fostered the smuggling of our subsidized petrol across the borders with our West African neighbours, where petrol is more expensive because it is sold at market pricing. Marketers who can profit twice as much from international markets as compared to the domestic Nigerian market, where the price of petrol is controlled, do so to the great detriment of Nigeria and Nigerians, exhausting our nation’s hard-earned resources and leading to a shortage of petrol.

Furthermore, Okumagba expressed regret that Nigeria has over the years been borrowing to fund subsidies on petrol importation. “We are now debt-distressed as repaying our debt is consuming a very significant percentage of our earned revenues. We should not continue borrowing to pay for “petrol subsidies” that generate nothing that we can utilize to repay the debts,” he remarked.