One month after fuel subsidies were removed in Nigeria, many entrepreneurs and business owners are bearing the brunt.
At his swearing-in as President, Bola Ahmed Tinubu made a controversial announcement on the removal of fuel subsidies, resulting in high prices and long queues nationwide.
Although the policy was to take effect on July 1, 2023, it sparked concerns and uncertainty as Nigerians rushed to buy fuel from filling stations.
Nigerians would have been excited that the endless wait and prolonged queues for fuel would cease to exist in the country, but the fuel price has now jumped from N185 per liter to N500 and above.
Despite claims by the Federal Government that it will take measures to cushion the effect of subsidy removal, its decision has caused widespread economic consequences as no measure has been put in place.
The federal government, the Nigeria Labour Congress, NLC, and the Trade Union Congress, TUC, are engaged in an eight-week deadline to resolve all contentious issues and implement the resolutions arising from the demands of labor.
The Daily Post observed that Nigerians with more than two cars have resorted to using just one.
Some have also cut down on their daily expenses as the prices of goods have gone up. This is even as a new tariff regime is about to commence in the energy sector.
Speaking to the Daily Post on Thursday, an entrepreneur from the Gia African Foundation, Dr. Utchay Udim, lamented the impact of the subsidy removal on entrepreneurs in the country.
Udim, who stated that he supports the removal of subsidies, maintained that the timing was wrong.
According to him, subsidy removal is a step in the wrong direction, and the federal government has to take urgent steps to cushion the effect on Nigerians.
He said, ”The impact is really massive; the prices of things are on the rise.
“If you had one million naira in your account, right now your spending power has been devalued.
”That N1 million is now N400, 000 because of the particular impact of fuel subsidy removal. Everything in Nigeria is tied to fuel: our food, energy, movement, and shelter are all tied to fuel. There will be a rise in property values and rent renewals.
”Some businesses run on generators; about 70% of businesses run on generators. Diesel is already expensive. Fuel is the major source of energy in Nigeria, so there is a great impact on businesses, especially for young people who are striving to survive. It is a right and wrong move to make, and the timing is not right.
”Removing fuel subsidies right now is very, very wrong; if I happen to be an adviser to the government, I will tell them to build our refinery or revamp the existing one before removing them. I heard about the palliative care; how will that help?
”What is N5000 palliative? It can’t do anything for you. Indomie is almost N6, 000, and it will soon increase. It is a wrong step in the wrong direction; something has to be done urgently.
”Nigerians are feeling the impact; we need to look at it critically so that we don’t impoverish more people. We have 130 million poor people; with this kind of move, we will have up to 200 million poor people.
“Nobody does things abruptly because you know you have investors coming in and people that your policies are going to affect; you do it gradually.
”I support the removal of subsidies because subsidies are a pure cartel business. Cartels benefit from it. Removing it is important and sacrosanct, but the timing is the problem.
“Those people that are benefiting from the subsidy, it is important if they are named, shamed, and prosecuted. That is the only way young people can have confidence; we can’t continue suffering for the sins of others, and they are doing business and having fun to the detriment of others.
“For the past two decades, the young people have suffered, and we cannot continue like that.”
Also speaking to our correspondent, the owner of a delivery service company, who pleaded anonymity, groaned that the removal of subsidies had almost crippled her business.
She said, ”Before the removal of the fuel subsidy, my delivery bikeman put N2500 worth of fuel for his movement, but right now we have to budget more for it.
“The price of delivery has gone up, and our clients have been complaining, but they understand it is not our fault. We do not get as many orders as we used to because sometimes the price of delivery is even more than the price of the goods to be delivered.
“I started the company after NYSC with two bikes because of a lack of employment. I have been able to build this company, and we have grown, but I am afraid that I may be unable to pay my staff. We are not a big company, so the pressure of all these is hitting hard.”
Similarly, a supermarket owner identified as Maduka Kachi said, ”Even if I supported the removal of subsidies, I did not foresee this kind of hardship. I just restocked my shop, and the new prices are something else.
“Running this store costs a lot because even if electricity has improved, we still run on generators.
“I also heard that starting next week, we will buy it for $700 per liter. If the government continues like this, we will be unable to pay taxes. You can’t be forcing people to pay taxes and bringing in policies that will cripple their businesses or make them run out of them. It is wickedness.”