Utweets
Dear President Bola Ahmed Tinubu, I write this letter with a sense of urgency, motivated by my recent experiences and the struggles Nigerians are facing due to the soaring cost of fuel. In the course of my voluntary and humanitarian work, I traveled across three states from Kano—first to Daura in Katsina, then to Jigawa, and finally to Kaduna—returning each time to Kano. Within just one week, I spent over ₦200,000 on fuel alone. ...READ THE FULL STORY FROM SOURCE ...READ THE FULL STORY FROM SOURCE
To compound my ordeal, some of the fuel purchased was diluted, damaging my vehicle and incurring additional repair costs.
This situation mirrors the economic reality millions of Nigerians are grappling with daily, as the rising cost of fuel increases transportation expenses, triggers inflation, and weakens household purchasing power. However, I believe, with strategic reforms and a well-coordinated approach, Nigeria can achieve a target fuel price below ₦200 per liter.
In this open letter, I present practical solutions that can help make affordable fuel a reality by addressing targeted subsidies, local refining, efficient supply chains, forex stability, deregulation, and the promotion of alternative energy.
Reintroducing Smarter Fuel Subsidies
Your Excellency, while the removal of subsidies was necessary to curb inefficiencies, I urge you to consider targeted subsidies as a more sustainable alternative. Blanket subsidies strain the economy, but focused subsidies can directly benefit essential sectors like public transportation, agriculture, and healthcare.
• Sectoral Subsidies: Direct fuel subsidies for buses, tractors, and healthcare facilities will reduce operational costs and improve service delivery.
• Digital Monitoring Mechanisms: Utilizing advanced digital tracking will ensure subsidies reach the intended sectors, minimizing corruption and preventing misuse.
Though subsidies come with fiscal challenges, restructuring the national budget and cutting wasteful spending can make this initiative viable.
Boosting Local Refining Capacity to Reduce Import Costs
Nigeria’s reliance on imported fuel makes prices vulnerable to global oil market fluctuations and exchange rate instability. To break this cycle, the government must prioritize local refining.
• Operationalize Refineries Quickly: Fast-track the effective operations of the Dangote Refinery and support modular refineries to boost local fuel production.
• Reduce Import Bottlenecks: Local refining will eliminate costs associated with import tariffs, shipping, and distribution, potentially driving prices below ₦200 per liter.
By creating an enabling environment for investors through incentives and cutting bureaucratic red tape, Nigeria can strengthen its refining sector and reduce fuel import dependency.
Streamlining the Supply Chain by Reducing Middlemen
The current fuel distribution system involves multiple intermediaries, leading to price inflation. A direct and transparent supply chain is essential to reduce costs.
• Direct Distribution Channels: Encourage refineries to supply fuel directly to retailers, cutting out unnecessary middlemen.
• Regulatory Oversight: Strengthen monitoring of depots and marketers to prevent hoarding, smuggling, and the creation of artificial scarcity.
A simplified supply chain will enhance efficiency, eliminate speculative pricing, and make fuel more affordable for consumers.
Stabilizing the Naira with Sound Forex Policies
As Nigeria imports a significant portion of its fuel, exchange rate fluctuations directly impact fuel prices. Stabilizing the Naira will ease this burden.
• Strengthen the Economy: Implement policies to diversify the economy, easing pressure on foreign reserves and stabilizing the exchange rate.
• Encourage Forex Inflows: Incentivize foreign investments and promote export-driven industries to improve Nigeria’s balance of payments.
With a stable exchange rate, the cost of importing fuel will drop, benefiting both marketers and consumers.
Deregulating the Market to Foster Competition
A competitive fuel market will promote efficiency, innovation, and lower prices. Although deregulation comes with challenges, it presents an opportunity for sustainable growth.
• Promote Fair Competition: With more players in the market, companies will strive to provide better services at competitive prices.
• Incentivize Investments: Offer tax breaks, grants, and low-interest loans to attract private sector investors, expanding the fuel sector.
By fostering a free market, Nigeria can create a win-win scenario where suppliers compete, and consumers benefit from lower prices.
Promoting Alternative Energy to Ease Market Pressure
Over-reliance on petrol is unsustainable. Encouraging the adoption of alternative energy sources will reduce demand and help stabilize fuel prices.
• Adopt Compressed Natural Gas (CNG): CNG is cheaper, environmentally friendly, and abundant in Nigeria, making it a viable alternative to petrol.
• Invest in Renewable Energy: Develop solar, wind, and biomass projects to diversify Nigeria’s energy mix and reduce dependence on fossil fuels.
As more consumers switch to alternative energy solutions, the demand for petrol will drop, easing pressure on the fuel market and promoting affordability.
Balancing Trade-offs for Long-term Benefits
Achieving a fuel price of less than ₦200 per liter will require a delicate balance between policy, market dynamics, and long-term investments.
Reducing taxes and reintroducing targeted subsidies may affect short-term revenue, but the positive impact on the lives of citizens will foster long-term economic growth.
Your administration must prioritize refining capacity, stabilize the exchange rate, streamline the supply chain, and promote alternative energy to build a resilient energy sector.
Continuous engagement with stakeholders—oil marketers, transport unions, and civil society—is essential to ensure smooth policy implementation.
A Call to Action
Mr. President, bold leadership is required to steer Nigeria towards a future where affordable fuel is a reality. With the right policies, commitment, and political will, achieving fuel prices below ₦200 per liter is not only possible—it is within reach.
I urge you to take decisive steps to reform the energy sector and ease the burden on Nigerians. Together, we can create a sustainable energy future where high fuel prices no longer hinder economic growth and the well-being of the people. Sir, with your leadership, Nigeria can transform its energy sector and set a precedent for other African nations to follow. ..ALSO READ FULL FROM SOURCE ↔️
Respectfully,
Development Journalist
