During an interview with Arise News, the spokesperson of the Labour Party, Kenneth Okonkwo, stated that there are two fundamental bases to fulfill for fuel subsidies to be removed in an economy without destroying the economy. He stated that the economy must be saturated with fuel and that monopolies must be prevented at all costs.
He revealed that we must be very careful when coming out of subsidy, just as we were careless when going in. He stated, however, that if there is a sufficient supply of fuel at first, it will help to maintain the fuel price.
According to him, “We should be as careful in coming out of the fuel subsidy as we were careless in going into it. We displayed recklessness and carelessness in going into it in the first place, so when you’re coming out, you won’t be as careless as you were in going in. So what I’m saying is that when you want to remove it, there are two fundamental bases, and I speak now as an economist, that you must fulfill in order to make sure that you don’t destroy the economy before building it. And the two basic econometrics that you must achieve are: you must saturate the system with fuel, and you must ensure there’s no monopoly. When you saturate the system with fuel, elementary economists will teach you that when supply is in excess,it maintains a cap on the price.
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Video credit: Arise News (9:50)
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