According to the recently released multidimensional poverty report of the National Bureau of Statistics (NBS), Nigeria’s poverty index was estimated to
be at 0.257, with about 133 million people being multidimensionally poor. This category of individuals are not in a position to purchase vehicles or own
generators that will run for several hours in the absence of power supply from the grid. The major touch point that they have with fuel consumption is indirectly through public transportation – and the majority of the vehicles that engage in
public transportation run on AGO (diesel) which has already been deregulated.
Hence, it is important that fuel subsidies are targeted at the poorest people to cushion the impact of the associated rise in transportation cost of subsidy removal.
Step 1- Identify vehicle owners who are eligible for petrol subsidy
A critical element of the plan to subsidise only the poor requires a process of
identification and validation of owners of shared passenger transportation
vehicles powered by petrol. These individuals will be registered in the usual
way for driver/vehicle licences leveraging on the existing data such as National Identification Number (NIN) or Nigerian Communications Commission (NCC)
phone/SIM registrations and linked to the vehicles they own using vehicle registration data. This registration will ensure that vehicle owners are captured
in such a manner as to avoid duplications and prevent abuse.
Based on a 2018 report by the NBS, there are 11.8m vehicles registered in Nigeria out of which 39% (or 4.6 million) are privately owned while 56% (or 6.7
million) are commercial vehicles, 1.1% (or 135,216) are government owned
while 0.4% (or 5,834) are registered for diplomats. According to the National
Motorcycle and Tricycle Riders Association of Nigeria, there are about 8 million
registered commercial motorcycles in Nigeria. There is also a sizable number of
motorboats, but many of these are unregistered due to non-enforcement of Nigerian Inland Waterways Authority’s (NIWA) registration requirement.
Step 2- Nationwide survey to ascertain quantum of fuel consumption
A survey or test run wil be conducted across all capital cities to determine average monthly fuel consumption by eligible transporters. The data for the
capital cities will be used as proxies for the rest of the country given that the highest fuel consumption is expected to be in the cities.
Step 3- Registration of eligible individuals and transporters
Having leveraged the data from banking information, tax authorities, lands registry, SIM registrations and the NIN, the database of qualifying individuals will be automatically onboarded on a secure platform which will serve as a national subsidy database.
Private taxis and those that work with hailing apps and vehicles that run on diesel will be excluded from this arrangement. Out of the about 8 million
registered commercial vehicles, if the vehicles that run on diesel and those not
usually patronised by the poor (ride hailing platforms) are excluded, this wil becloser to targeting the individuals who really need fuel subsidy.
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