The Falsehood called Fuel Subsidy in Nigeria
Over the years, different governments in Nigeria has come up with one different package or the other on the issue of fuel subsidy which they all claim its for the betterment and welfare of its citizenry.
What is Subsidy:
A subsidy (also known as a subvention) is a form of financial assistance paid to a business or economic sector. Most subsidies are made by the government to producers or distributors in an industry to prevent the decline of that industry (e.g., as a result of continuous unprofitable operations) or an increase in the prices of its products or simply to encourage it to hire more labor (as in the case of a wage subsidy). Examples are subsidies to encourage the sale of exports; subsidies on some foods to keep down the cost of living, especially in urban areas; and subsidies to encourage the expansion of farm production and achieve self-reliance in food production.
Subsidies can be regarded as a form of protectionism or trade barrier by making domestic goods and services artificially competitive against imports. Subsidies may distort markets, and can impose large economic costs. Financial assistance in the form of a subsidy may come from one’s government, but the term subsidy may also refer to assistance granted by others, such as individuals or non-governmental institutions.
In Nigeria, successive governments has introduced fuel subsidy in different ways and forms but which at the end, the so called subsidy goes to the pockets of the individuals concerned.
Is there true subsidy of petroleum products in Nigeria?
Going by the definition of the word: subsidy, could it be said that there exist true fuel subsidy in Nigeria? Before answering this difficult question, one has to compute all the necessary facts about fuel extraction, fuel refining and distribution to ascertain their costs and once this is done, it could now be judged whether there is true subsidy of fuel or not based on their market price, the government over the years has kept the citizenry in the dark as regards to the number of barrels that the country produces talk less of their unit price of production. And in this suspicion, the government will always come up with cooked figures and tell its citizens about the existence of fuel subsidy.
The current subsidy in the country is the imagination of the government as it has become an open secret that the cabals in and outside of government in this country who for their selfish interests has grounded the refineries and for the same selfish interest has made the country to export crude petroleum products outside of the country to be refined by their companies and cronies and import same refined products at the expense of the country, and that is why we are currently experiencing subsidy.
The way out.
If the government is sincere about the whole thing it calls subsidy, let it first of all overhaul the whole refineries in the country to start to perform at its optimal capacity and then let it remove the so called subsidy which came as a result of its inefficiency and outright greed at the expense of its citizenry, what Jonathan’s government need to do is to put round pipe in a round hole by fixing all the necessary infrastructures in place including the fixing of the refineries and then remove the imputed subsidy, anything short of addressing the main issue will surely back fire as Nigerians can resist any attempt to inflict more hardship on them as a result of inefficiency in governance.
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