Is there anything wrong with fuel subsidy as a policy? Is Nigeria the only country that provides subsidy for the benefit of its citizens? Certainly not! What
Corruption is the reason why fuel subsidy in Nigeria is different from that of United States, China, and Saudi Arabia among others. There are many in United States and around the world who want subsidy on fossil fuel to be removed, but their reasons are different from that of Nigeria’s government.
Like I stated earlier, the problem with fuel subsidy in Nigeria is squarely caused by those saddled with the responsibility of its implementation. Our ranking as a fantastically corrupt country is essentially as a fallout of the corruption in the Nigerian oil industry! Nigeria’s oil industry is the epicentre of that corruption which is enabled by government officials and their corporate sector collaborators.
In January, the Nigerian National Petroleum Company demanded a N3 trillion subsidy fund for the 2022 fiscal year. The demand was premised on a daily consumption rate of 65.7 million litres and an oil price peg of $80 per barrel. The House of Representatives revealed that it would probe the 65.7 million daily oil consumption of the country even as the Nigerian Labour Congress and governors expressed doubts on the accuracy of the figure.
It is obvious that there is no problem with fuel subsidy because fuel subsidy is necessary to make the product affordable to millions of Nigerians who live in the poverty capital of the world. Government pays fuel subsidies to keep the price of fuel affordable for citizens, as well as to stimulate economic growth. Fuel subsidies are a form of government intervention to reduce the cost of fuel by providing direct financial support to oil companies, and as such, subsidize the product to consumers.
Another reason always thrown around for subsidy removal is because fuel imported at great cost to the nation is sold cheaply in neighbouring countries like Niger, Chad, Benin Republic and Cameroon among others. Those who make this spurious argument forget that one of the responsibilities of government is to secure our borders and protect the country from physical and fiscal attacks.
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