What is subsidy?
subsidy is a grant paid by government to an Enterprise for public benefit.
in the case of Fuel subsidy in nigeria, The federal government is paying outrageous amount to some few oil dealers so as to sell fuel to Nigerians at a lesser rate.
The entire Oil sector was initially subsidized before now, but factors like Subsidized product diversion, padding and sabotage resulted to the need for review of subsidy regime.
Diesel, Kerosene and Cooking gas was part of oil product that was initially subsidized. When the load of subsidy was about melting the Nation’s economy, the government at centre agreed to do away with subsidy at its entirety.
This decision, if taken at once may affect the the populace. thats why lesser consumed products was first relieved of subsidy. PMS is the only oil product with subsidy as at Jan, 2023. Meanwhile, a decision to remove Subsidy has long ago been taken with its effect from june 2023.
Subsidy if fully removed, the following is expected.
- Full de regulation of the oil sector.
meaning that every interested investor can own and operate mega or modula refineries within the country.
- End of Economic Saboteurs in the oil sector and Creation of competitive market for the masses benefit. just as it was for Telecommunication industry during OBj regime, so will it be now.
Alot of refineries will spring up, and they will begin to sell products at competitive prices
- Reduction of needless rise in internal and external debt of the country.
The Amount involve in funding subsidy in one month, is enough to restructure the education system of nigeria to the utmost expectation in five years.
- Access to needful funding to implement expected high profile facility. the ambiguous amount involve in financing subsidy, if diverted to other sector of the economy, there will be a better nigeria.
- Creation of enabling environment and raw materials for industrial revolution
Most of the waste and bye products of refineries are best raw materials for industries.
- Creation of surplus job
- Reduction in the cost of living as a result of availability of surplus economic ingredients
Among other benefits..
One funny but sincere fact about Nigerian Fuel subsidy is that larger percentage of the subsidized products are diverted to other countries.
as known, subsidy was supposed to benefit the masses, but its some few individuals that are sabotaging the country with it.
Ending subsidy is best for the nation.
©SAMUEL O. OGUNLANA.