Professor Kingsley Moghalu in a recent interview said that provision of an effective public transportation system in the country is one of the critical steps to be taken in phasing out fuel subsidy.
According to Moghalu, a former deputy governor of the Central Bank of Nigeria (CBN)
“There are a number of procedures to be followed by the Federal Government before removing the subsidy on Premium Motor Spirit (PMS), also known as petrol. One of such critical steps to be taken is the provision of an effective public transportation system in the country”.
“If you spend N500 billion, you could have a very effective public transportation system across this whole country and the people, therefore, who can afford petrol when you remove the subsidy – the middle class and wealthy people; they can carry on and poor people who can’t afford the commercial price of petrol which is being subsidised today can use public transport to move around.
According to Moghalu, the current price of petrol in Nigeria is ridiculously cheap compared to other African nations and this is a major factor fueling the smuggling of the product in parts of the country
“I think subsidy is really like a bone in our throat. It is a very difficult problem but as to whether it should continue, let me tell you the answer is no; but you cannot remove it precipitately,” he stated.
“There should be a proper plan of investments in public transportation before you can remove petroleum subsidy. I want you to note that the only hydrocarbon product that is subsidised now in Nigeria is Premium Motor Spirit (PMS) – petrol; diesel, kerosine, all those other things are selling at commercial prices.
“So, there is nothing impossible about removing the petroleum subsidy, although some people may want to make it look as if it is an entitlement we have because we produce petrol.”