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Alhaji Atiku Abubakar, the ADC presidential candidate, has causedchaos among policy analysts by threatening to restore petrolsubsidy if he is elected president. Many have been asking: why is he trying to drag us back after we had finally crossed the Rubicon?By the way, bringing down the price of petrol looks great on paper. Many now see Atiku as the compassionate candidate who feels the pain of the masses. It is often said that the major problem with reforms in Nigeria is not the pain but the reversal after Nigerianshave persevered and are close to reaping the rewards. They just suffered for nothing, like a student who toiled to write an exam only to fail to submit the answer script.
I have been following Atiku’s political career closely for decadesand I can say for free that his threat to restore subsidy is just politics. Atiku is not stupid. He knows that while the policy might bring down pump prices temporarily and make people happy, the consequences could be fatal to the economy. If oil is $80 and hegives the refineries at $60 (“production side”, he said), the federation will be losing $20 in revenue on every barrel. This, by any measure, is huge. Federal, state and local governments will be instantly hit by a fiscal crisis. Subsidy is not to be confused with offering tax incentives to oil majors to invest in exploration. That one is for the future and it takes several years to yield dividends.
