Return of petrol subsidy may revive fuel queues, threaten minimum wage — APC chairman

The national chairman of the All Progressives Congress (APC), Nentawe Yilwatda, has warned that restoring petrol subsidy could revive fuel queues and weaken the ability of governments to sustain the current minimum wage.

Yilwatda spoke in Abuja when he received a delegation of economic stakeholders who visited him to discuss Nigeria’s economic situation, ongoing reforms and prospects for sustainable growth.

His comments came days after Atiku Abubakar, presidential candidate of the African Democratic Congress (ADC), said he would restore petrol subsidy if elected president in 2027.

Atiku has also accused the federal government of failing to properly account for funds saved from the removal of the subsidy, arguing that the resources should have been used to reduce poverty and finance development.

President Bola Tinubu removed the petrol subsidy on May 29, 2023, shortly after assuming office. The policy triggered a sharp increase in petrol prices and contributed to higher transportation and living costs.

However, Yilwatda said Nigerians should consider the wider economic consequences of restoring the subsidy rather than focusing only on the possibility of cheaper petrol.

“Subsidy may appear attractive because it promises cheaper petrol, but Nigerians must also ask the bigger question: who pays for the subsidy and what happens to the resources that government must divert to finance it?” he said.

“A policy cannot be judged only by its immediate benefit at the pump. We must examine its impact on government revenues, salaries, pensions, education, healthcare, infrastructure and the overall capacity of government to meet its obligations to citizens.”

The APC chairman said the removal of the subsidy had resulted in increased federal allocations to states, improving the finances of many state governments.