With the removal of fuel subsidies, Governor Dapo Abiodun of Ogun State believes his government’s payment of N10,000 cash payments to civil servants and pensioners will alleviate hardships and serve as a model for similar interventions in the private sector.
The payment is one of the palliatives recently introduced by his administration, almost two months after President Bola Tinubu, in his May 29 inaugural address, declared that “fuel subsidy is gone”.
The strategy resulted in a near-instant increase in petrol prices, from roughly N185 to N500, and as high as N617 last week. With rising transportation and food prices, thousands have resorted to long-distance walking.
“We cannot intervene by this means to the private sector because they don’t work for us,” Abiodun said during a live appearance Tuesday on Channels Television’s Politics Today.
The governor added that there were other provisions rolled out on Monday that would affect “as many of those that are not in public service as possible”, including the conversion of commercial vehicles’ engines from Premium Motor Spirit (PMS) — that is, petrol — to the significantly more economical Compressed Natural Gas (CNG).
According to him, with the monetary intervention by the state government, the private sector will also be motivated to begin to augment the take-home pay of its workers affected by the removal of fuel subsidy.
Abiodun explained that the payment of N10,000 was the result of long discussions with the state chapters of the Trade Union Congress of Nigeria (TUC), the Nigeria Labour Congress (NUC) and the Joint Negotiating Council (JNC).
“We sat down with the TUC, JNC and NLC weeks ago. As soon as the subsidy was removed, we began to have these conversations and the idea was to reach a compromise as to what would be acceptable to all,” he said.
“And at the end of those several meetings, we all agreed that a payment of N10,000 across the board from level one to level 17 would create that immediate impact and bring relief to civil servants and of course pensioners that have to move from home to work every day.”
The payment would be made over the next three months in the first instance, the governor noted, adding that the civil service and the pensioners in Ogun State comprised about 74,000 persons.
Abiodun estimated that with about three to four dependants per worker or pensioner, about 280,000 persons would, directly and indirectly, be impacted by the cash transfer.
“Yes, they probably represent less than 10 percent of the population of Ogun State, but what we aimed to do was to immediately begin this intervention believing that the private sector will also begin to follow suit,” he said.