Tinubu's foot soldiers say the 30-day petrol discount is “not a subsidy”, because @taiwoyedele says it.
Funny enough, no where is energy economics determined by nomenclature. An Arab expression days, "𝘼𝙡-ʿ𝙞𝙗𝙧𝙖𝙩𝙪 𝙗𝙞𝙡-𝙢𝙖ʿ𝙖̄𝙣𝙞̄ 𝙡𝙖̄ 𝙗𝙞𝙡-𝙖𝙨𝙢𝙖̄ʾ."
“What matters are the meanings/reality, not the names.”
In a layman's language:
Nigeria today does not have a functioning govt-owned refinery supplying NNPCL’s petrol stations. The first question you'd ask the foot soldiers is; what does NNPCL pay for the product, what does it sell it for, and who absorbs the difference?
Internationally, the @IMFNews and IEA examine energy subsidies through the economics of the price gap, not simply whether a govt has a budget line called “subsidy.”
If the Govt/NNPCL acquires petrol at ₦X and sells it to consumers at ₦Y, where Y is below the relevant economic cost, the difference does not disappear because we call it a “discount.” Someone ultimately absorbs that difference. What we should pay attention to is this:
It may not be a conventional budgetary subsidy, but economically it can still amount to a 𝗽𝗿𝗶𝗰𝗲 𝘀𝘂𝗯𝘀𝗶𝗱𝘆, 𝗶𝗺𝗽𝗹𝗶𝗰𝗶𝘁 𝘀𝘂𝗯𝘀𝗶𝗱𝘆, 𝘂𝗻𝗱𝗲𝗿-𝗿𝗲𝗰𝗼𝘃𝗲𝗿𝘆, or 𝗴𝗼𝘃𝘁-𝘀𝘂𝗽𝗽𝗼𝗿𝘁𝗲𝗱 𝗽𝗿𝗶𝗰𝗲 smoothing, depending on who ultimately absorbs the loss. That is why the govt should be able to tell us four things:
Govt/NNPCL’s actual acquisition cost per litre?
The applicable international/reference price? The actual price paid by beneficiaries?.
Who ultimately bears the difference?
If the numbers show that there is no govt compensation, no NNPCL under-recovery, no foregone revenue and no other entity absorbing the shortfall, then strong'y, Taiwo can call it simply a commercial discount. But if somebody is absorbing the difference, changing the name does not change the economics.
So the question is not simply:
“Is this a subsidy?” I think what we should ask is: “Who is paying for the discount?”.
Why didn't the govt see the need for this "discount" from May 2023 to date? Why now that the opposition has exposed the govt that we can actually re-introduce a kind of subsidy? And after the 30 days, what next?
Shame suppose catch you small, though we know you're shameless.
Does it means the federal government don't know what to do and because they know elections is by the corners they are now re-introducing fuel subsidy for a period of 30days, how will this discount help Nigerians and why was it not introduced earlier before now?, it's very shameful that Tinubu's government has lost direction and they are now running from pillar to post trying to make Nigerians see reasons to vote them in for a second tenure because that's what the fuel discount is aimed at and Nigerians are more wiser now except few who still wants to be slaves.
So after this proposed 30 days of discount we will still go back to buying fuel at a higher price?, is that not stupidity and lack of leadership vision to the people, it's very obvious that this government is incompetent and not worthy of leading. Instead of giving discount for 30 days it's better we remain the way we were than few days of fuel subsidy.
