The country produces about 2,4 million barrels of crude oil but the majority if being exported abroad. Nigeria is a nation endowed with abundant human and material resources. Nigeria subsidy reinvestment and empowerment programme sure. Retentions, however, was a problem, and the surep health initiative was designed with that in mind. Understanding oil subsidy in nigeria oladoyin zaccheus the college at brockport follow this and additional works at. Nigerias fuel subsidy continues to crowd out other development spending. The real cost of fuel subsidy and tax implications by taiwo oyedele the recent announcement by the federal government of nigeria to remove fuel subsidy with effect from january 2012 has been generating a lot of interesting debates and mixed reactions from different quarters. Learn how the treasure has almost turned into a disaster for the country.
Nov17 dec17 jan18 feb18 mar18 apr18 may18 jun18 jul18 aug18. History of fuel price increase in nigeria, the increament started from 1973 re. Pdf the implications of fuel subsidy to nigerian economy. President buhari recently stated that nigerias costly fuel subsidy.
Notably, the proposed study focuses on petroleum subsidies in nigeria, as it weighs. But on wednesday, president buhari said his government would no longer be able to sustain the process. Nigerian government and oil subsidy regime african. The results showed that fuel subsidy factors fuel subsidy and price accounted for 50. Table 1 presents history of fuel pump prices in nigeria from 1978 to 2016. What is fuel subsidy history in nigeria 2 years ago 11154 views by evelyn bankole being an oil rich country and the largest oil producing country in africa nigeria has survived a tough crisis connected with the downfall of the crude oil industry. The results of this evaluation are feeding into policymaker discussions on what steps can be implemented to boost retention of skilled midwives. Compensation mechanisms for fuel subsidy removal in nigeria. Part of the african history commons repository citation zaccheus, o. Highlights this paper investigates whether the existence of fuel subsidy in nigeria is a fact or fallacy.
Buhari current regime, the pump price of petrol is n145. Evidence, however, suggests that nigerias fuel subsidy regime may diminish investment in public electricity, causing unreliable power supply and decreased overall energy consumption. Compensation mechanisms for fuel subsidy removal in nigeria acknowledgements the majority of this papers research and analysis was conducted by the nigerian institute for social and economic research niser, with iisds global subsidies initiative gsi having provided. Contrary to the subsidy reform plan, the volume of iranian subsidies given to its citizens on fossil fuel, which increased 42. Five reasons why nigeria ended fuel subsidies africa dw. Nigeria is the biggest producer of crude oil in africa but still needs to import pms. Oil has always been nigerias biggest natural treasure. Algeria 1998 food riots, bolivia food riots 1985, jamaica fuel subsidy riots1985, jordan food riots 1996. Protests took place across the country, including in the cities of kano, ojota part of metropolitan lagos, abuja. The bottom line is that there is nothing like fuel subsidy and there is infact no subsidy on anything in nigeria, let alone fuel. The domestic and international implications of fuel subsidy removal crisis in nigeria by onyishi, anthony obayi ph. Also, fuel subsidy contributes to damaging the environment through its effect on marginal investment in new capacity holton, 2012.
Fuel subsidy removal and the nigerian economy edustore. For some years now, one of the most taunting and complex socioeconomic policy issues in nigeria remains the issue of fuel subsidy removal. Protests took place across the country, including in the cities of kano, ojota part of metropolitan lagos, abuja, minna, and at the nigerian high commission in london. It brings the experiences and perceptions of the average nigerian to the forefront, lays down the arguments of both sides of the fuel subsidy debate, and underlines the culture of impunity that has been the bane of accountability in nigeria. For several years, nigeria enjoyed subsidy on gasoline. The fuel subsidy in nigeria if removed will translate to a sudden and massive tax on an essential commodity fuel, which will have the knock off effect of raising food prices. Jan 09, 2018 by michael eboh the nigerian national petroleum corporation, nnpc, has spent n112. Fuel subsidy, agricultural sector, petroleum, budgetary. Pdf fuel subsidy removal and the nigerian economy paul. The benefits of fuel subsidy to the average nigerian was short lived. Opinions have differed sharply in nigeria on the continued existence of fuel subsidy. In the early 1950s and at independence, agriculture was the chief foreign exchange earner of this nation. According to vanguard, nigeria spent about n10 trillion on subsidy payments.
When the researcher chose this topic fuel subsidy removal and nigerian economyshe was inspired on how nigerians reacted towards the fuel subsidy removal, the strikes, violent demonstrations, high cost of fuel and transportation etc, it was these problems that made the. The chapter covered the conceptual framework, overview of the nigerian oil and gas sector, the history of fuel subsidy in nigeria, effects of subsidy, rationale for. Remove fuel subsidy, imf tells nigeria punch newspapers. Origins of nigerias fuel subsidy regime since the 1970s, the nigerian government has exerted influence over domestic fuel prices through a combination of price ceilings and both implicit and explicit subsidies to the oil sector. The removal of fuel subsidy will help in a speedy acceleration in agriculture, education, health sector, water supply, power sector, road and rail transportation sector and youth empowe4rment programmes will not only head to transformation of public infrastructures in nigeria, but will also ensure the gainful employment of millions of nigerians. Evaluating the impact of nigerias fuel subsidy regime. Government has over the years insisted that the subsidy it pays on petroleum products are too much for it to bear and that almost all the funds go into private pockets at the end of the day. There have been dearth of infrastructural investments. Despite the huge amount of money nigerian government spends on fuel subsidy, the situation in the oil sector has not been promising and nigerians still experience scarcity of premium motor spirit. With emphasis on petrol gasoline, this section provides an overview of petroleum subsidy policy in nigeria including its history, pricing mechanism, institutional frameworkand policy administration. Fuelling poverty tells the story of the fuel subsidy management in a manner that demystifies the numbers and humanizes the tragedy. The question the proponents of fuel subsidy removal are still able to answer is how significant will the fuel subsidy removal be on the socioeconomic activities in the country given the fact that it is the main source of energy for all facet of the economy. Occupy nigeria was a sociopolitical protest movement that began in nigeria on monday, 2 january 2012 in response to the fuel subsidy removal by the federal government of president goodluck jonathan on sunday, 1 january 2012.
Fuel subsidy is the nigerian governments financial aid to nigerians to enable the consumption of fuel at a cheaper rate, end unpredictable supply, and ensure stability in domestic fuel price. However, the controversy over the removal of fuel subsidy was sparked off in june 2011 at the instance of nigeria governors forum, which includes governors of the 36 federating states in nigeria. The elasticity of fuel demand shows that a unit increase in subsidy leads to a 0. Fuel subsidy was, before the coming of the goodluck jonathans administration, a policy of the federal government meant to assist the people of nigeria to cushion the effects of economic hardship. Abstract when the researcher chose this topic fuel subsidy removal and nigerian economyshe was inspired on how nigerians reacted towards the fuel subsidy removal, the strikes, violent demonstrations, high cost of fuel and transportation etc, it was these problems that made the researcher carryout this work. Africas largest oil producer, nigeria, had introduced fuel subsidies to keep prices at bay. The effects of subsidy removal on the effective marketing of petrol in nigeria includes abstract and chapter one, complete project material available the effects of subsidy removal on effective marketing of petrol in nigeria a case study of enugu stateabstractalmost every home and business is powered by generator fired by subsidized petrol. Nov17 dec17 jan18 feb18 mar18 apr18 may18 jun18 jul18 aug18 sep18 oct18 nov18 imported petrol locally re. It is a story that brings to life the pain and helplessness of. May 18, 2018 the government introduced the fuel subsidy in nigeria, which has lasted for many years.
The decision by the government to out rightly remove the subsidy on fuel ignited series of arguments and. Fuelling poverty, a documentary made against the backdrop of the january 2012 protest after the removal of the fuel subsidy, attempts to compress in less than 30 minutes the sad story of corruption in nigeria and the mismanagement of oil wealththe mainstay of nigerias economy. Fuel subsidy removal and national development in nigeria. Dilemma of the worlds most populous black nation 05 month trend in nigeria s petrol supply15 how exposed is nigeria s petrol price to exchange rate volatility. The fuel claiming to be highly subsidised is the fuel taken out of the country by the oil cabals to be refined and imported back to be sold at the pump to nigerians. D eme, okechukwu innocent emeh, ikechukwu eke jeffrey department of public administration and local government, university of nigeria, nsukka abstract a flip over from the economy is the issue of fuel subsidy removal, which many. Nigeria fuel subsidy scheme hit by corruption world news. The fuel subsidy crisis has woken nigerians up tolu. History of fuel price increase in nigeria from 1973 to 2015 by ivandragon. Other mineral deposits like coal, tin and agricultural resources. Similarly, a unit increase in fuel price accounts for a 0.
Dilemma of the worlds most populous black nation 05 month trend in nigerias petrol supply15 how exposed is nigerias petrol price to exchange rate volatility. The evolution of the fuel subsidy regime is closely related to nigerias process of. However, the controversy over the removal of fuel subsidy was sparked off in june 2011 at the instance of nigeria governors forum, which includes. Fuel subsidy reform and environmental quality in nigeria.
Nigeria is a nation endowed with abundant human and mate. Jan 10, 2012 nigerias fuel subsidy continues to crowd out other development spending. Fuel subsidy removal and the nigerian economy project topics. The imf had in its 2019 article iv consultation on nigeria noted that phasing out implicit fuel subsidies while strengthening social safety nets to mitigate the impact on the most vulnerable would. Nigeria introduced a program in 2009 to improve the availability of midwives at health clinics. This research paper explains the history of the oil. The political economy of fuel subsidy removal in nigeria citeseerx. History of fuel price increase in nigeria from 1973 to 2015. The history of fuel subsidy removal in nigeria is rather a long one particularly with the negative effects it has on the polity. Gradually, the aim of the military government that introduced fuel subsidy was subdued and defeated. Tracking the history of fuel subsidy in nigeria tuesday.
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