After five years of regular fuel supply around the Christmas season, Nigerians were this year reminded of those days when the Yuletide came with tales of woes of lack of fuel scarcity, accompanied by many nights spent in search of the elusive petrol and transport fares that spike.

The current fuel scarcity makes it the third time this year alone in which we witnessed long queues and motorists stranded with empty tanks in their car. Naturally, this will bite harder as it comes at a period where a lot of people are travelling across the country for the festivities.

These suddenly recurring fuel scarcity crises has been attributed to a lack of a clear government policy on fuel subsidy – whether it will be maintained or removed. The economics of fuel subsidy at the moment vis-à-vis government finances shows that removing the subsidy is the better decision to make.

With declining government revenue and fuel subsidy alone taking up to N1 trillion in recurrent spending, removing the subsidy will free up a lot of government funds that can be better spent, especially in infrastructure to improve our business environment and create jobs.

Not only have that, the current global low price of crude oil makes refining cheaper, and based on the pricing template of the Petroleum Products Pricing Regulatory Agency (PPPRA), the price even without subsidy will not differ from the official price of N87 per litre.

It bears pointing out too that fuel is sold at this official price in only Lagos and Abuja, with other parts of the country paying as high as N300 per litre. For now, availability of the product is far more important than the price.

It is evident that President Muhammadu Buhari is averse to the removal of the subsidy, but he is making matters worse by not being clear on whether he wants to maintain the subsidy or not.

A few months ago, he sent a supplementary appropriation bill to the Senate of N[ ]billion which largely went to paying the backlog of subsidy claims owed to fuel marketers.

Considering the fact that the 2016-2016 Medium Term Expenditure Framework, the budget planning document yearly budgets are based on does not contain a line item for fuel subsidy, it seems that the Federal Government intends to pay subsidy claims as when they arise by sending supplementary appropriation bills to the National Assembly.

This lack of clarity only serves to worsen matters, as banks will be reluctant to finance fuel importation when there is no specific date of repayment. It also makes things worse for the importers themselves as the delays in payment of subsidy claims means interests on bank loans pile up.

The time is ripe for President Buhari to make the bold move coupled with his still high political goodwill to remove the subsidy once and for all.

Let the price of the fuel be determined by market economics as it is better that the fuel be available, even if it costs more than N87 per litre, than to live under the illusion that we can maintain it with the poor compliance of the official price, declining foreign reserves and reduced government.

Not only that, deregulation of the downstream industry will be an incentive for private investors in refining. Their oft-repeated complaint is that the fixed price is not sustainable enough for them to make profit on their investments.

We hope that President Buhari makes the better decision of removing fuel subsidy or at worst, come up with a clear, sustainable policy regarding fuel subsidy so that the uncertainty will be done away with, giving fuel importers the confidence to import fuel and have it distributed across the country.

Op-Ed Editor