An economist and public affairs analyst, Dr. Samson Simon, has advised the Federal Government against the total removal of petrol subsidy, warning that the move could have severe economic consequences.
Reacting to Aliko Dangote’s call for subsidy removal during a Bloomberg TV interview, Dr. Simon argued that while removing the subsidy could theoretically free up resources for essential state needs, Nigeria’s insufficient local refining capacity makes it an impractical solution at this time.
Dr. Simon, the Chief Economist at Economics & Data Limited, emphasized that without adequate domestic refining and competitive market conditions, Nigerians might face increased fuel prices and suffer from a monopolized market.
He highlighted the dangers of allowing Dangote’s refinery to dominate the industry, drawing parallels with the cement market where prices remain high despite local production.
He advocated for fostering competition within the oil industry to prevent monopolistic practices that could lead to inflated fuel prices.
Dr. Simon suggested that alongside subsidy removal, the government should explore strategies to lower pump prices through domestic refining and feedstock supply.
Dr. Simon stressed the importance of implementing these measures before considering subsidy removal, ensuring that Nigerians do not bear the brunt of economic adjustments.
