Naccima nigeria national association of chambers of commerce, industry, mines and agriculture 18 november 2011 the ongoing debate on the removal of fuel subsidy by the federal has called for immediate action by business member. Fuel subsidy removal in nigeria when the subsidies were removed by goodluck jonathan in 2012, the price of petrol became twice as high. Reform of the fuel subsidy regime is fundamental to the overhaul of the nigerian economy and the achievement of inclusiveand sustainableeconomic diversification and growth. Scope of the survey this study covered several locations in lagos and across some of the northern and eastern parts of nigeria.
Negatives of january 2012 oil subsidies removal in nigeria nigeria labour congress nlc and trade union congress tuc reacted to the sudden. Trust in government and the politics of fuel subsidy removal. A complete removal of the subsidy was only in place for two weeks before civil unrest pushed the government to reinstate part of the subsidy. The debate on subsidies for refined petroleum products has produced strong arguments for and against the removal of fuel subsidy. Fuel subsidy removal programs are sensitive to economic structure, level of. Impacts of removing refined oil import subsidies in nigeria on. Impact of fuel subsidy removal on government spending tri widodo gajahmada university, indonesia gumilang aryo sahadewo gajahmada university, indonesia sekar utami setiastuti gajahmada university, indonesia maftuchatul chaerriyah gajahmada university. Fuel subsidy reform and environmental quality in nigeria. The findings of the study also indicate that creating new institution s to manage the compensation schemes is unnecessary. 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. Direct benefit transfer of lpg cooking gas subsidy in india as shown by international experience, efforts to reform energy subsidies have a mixed record of success. Fuel subsidy removal as an imperative for enhancing business development in nigeria. Does the incremental increases in the pump price of fuel undermine the living standard of nigerians. The above scheme of service should apply to the grades of.
Remove fuel subsidy, imf tells nigeria punch newspapers. Impact of petroleum subsidy removal on government expenditure. Pdf governments incompetence causes public restlessness. The mo ibrahim index which tracks governance in africa rates nigeria 41st out of 53 african countries it. Impacts on poverty of removing fuel import subsidies in nigeria1 authors. Full removal scenario 1 causes the highest change in prices as it removes the subsidies on imported petroleum products without applying any compensation mechanism. The impact of gasoline subsidy removal on the transportation. Jan 25, 2016 nigerian government removes kerosene subsidy the federal government has officially ended the payment of subsidy on kerosene. Fuel subsidy is the money paid by the federal government of nigeria to reduce the cost of refining petroleum products, especially fuel. 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. Why removal of fuel subsidy will help nigerians tinubu.
Has the fuel subsidy probe improved on national revenue accounting. A citizens guide to energy subsidies in nigeria produced by center for public policy alternatives cppa and the international institute for sustainable developments global subsidies initiative. Fuel subsidy and national development in nigeria, 199920. The major objective of the study is to examine the impact of subsidized prices of petroleum products on government expenditure in nigeria.
Fuel subsidy, agricultural sector, petroleum, budgetary. D department of economics, benue state university, makurdi nigeria abstract the removal of subsidy from petroleum products in nigeria has constantly generated concerns, debates and resistance. Discussion on subsidy removal from nigerian economy. Fuel subsidy removal in nigeria essay topics, sample papers. The solution to fuel scarcity and fuel subsidy issues in. The nigeria labour congress nlc has rejected the removal of the petroleum subsidy by the federal government. He said many people are against the removal of subsidy because it has been on for a long time and people are already used to it. Current situation in lagos the current situation in lagos state nigeria is tensed.
Reflections on the interventions strategies to sustainable development doki, naomi onyeje ph. Section 2 discussed key features of the petroleum subsidy in nigeria. Pdf fuel subsidy removal as an imperative for enhancing. As at 2014, nigeria imported 886 million barrels of petroleum products, making it the th largest petroleum importer in the world. Impacts on poverty of removing fuel import subsidies in nigeria. Deregulation and anti subsidy removal strikes in nigeria, 2000 2012 by prof. Below are their findings crazy queue at several filling stations in lagos the roads are deserted ojota several petrol. Osibanjo, education minister sued over removal of crs from. May 23, 2012 may 23, 2012 nigeria fuel subsidy removal dire consequences the federal governments unpopular plan to fully remove fuel subsidy is a ticking time bomb that will do nobody any good. 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. Nigeria is a country blessed with abundant human and material resources. The politics of fuel subsidy, populist resistance and its. Jan 02, 2012 crazy line up at filling stations jan 2, 2012 fuel subsidy removal in nigeria.
Bank of nigeria cbn, claimed that subsidy removal had become inevitable to avert the collapse of nigerian economy oji and eme, 2014. Impacts of removing fuel import subsidies in nigeria on. However, this issue has become highly contentious in recent time due to the incessant nature and the effects on the economy. Impacts on poverty of removing fuel import subsidies in. International monetary fund chief christine lagarde.
Data for about eight different periods where fuel hike occurred in nigeria was used, and a mathematical model with the aid of a graph, was also developed to aid estimated calculation of nairas value. Deregulation and anti subsidy removal strikes in nigeria, 2000 2012 article pdf available february 2012 with 80 reads how we measure reads. Petroleum, a very important source of energy and economic commodity in nigeria, has had so many problematic issues since the 1980s. Compensation mechanisms for fuel subsidy removal in nigeria. Ogundipea adepartment of economics and development studies, covenant university, ota, ogun state, nigeria. Effect on growth article pdf available in the journal of middle east and north africa sciences 38. The study used secondary data from 1985 to 2016, sourced from the central. The forum visited president jonathan in the wake of the national debate over the payment of the new n18,000 minimum wage. Lafiaji barely six weeks after nigeria received rare favourable commentaries in the international media for. This paper provides a detailed picture of the indias reform of household. Presented in partial fulfillment of the requirements for graduation in the college honors program. There is a significant negative relationship between. The history of fuel subsidy removal in nigeria is rather a long one particularly with the negative effects it has on the polity. Nigeria records 20 new coronavirus cases, two deaths.
Evaluating the impact of nigerias fuel subsidy regime. For some years now, one of the most taunting and complex socioeconomic policy issues in nigeria remains the issue of fuel subsidy removal. The nigeria oil industry is hitherto fraught with corruption and sharp practices. Pdf the aim of the current study is to develop and analyze the contributions of. After the complete removal of the subsidy in january 2012, the fuel price increased from 65 naira per liter to 140 naira per liter the economist, 2012. 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. Preindependent nigeria had agriculture as the major foreign exchange and revenue earner. The domestic and international implications of fuel subsidy removal crisis in nigeria by onyishi, anthony obayi ph. A disaggregated poverty analysis of fossil fuel subsidy reform 2 1. Deregulation and antisubsidy removal strikes in nigeria. Deregulation and anti subsidy removal strikes in nigeria, 2000 2012. Nigerian government removes kerosene subsidy sahara reporters. The governments fiscal policy stance following subsidy removal is important in determining the.
This paper aimed to highlight the result of a study on the effect of kerosene price subsidy removal on households. Fuel subsidy reform and environmental quality in nigeria opeyemi akinyemia philip o. Specifically, the story of subsidy removal dates back to 1978 when the then military government of gen. Monday 2 nd, january 2012 nigerians took to the streets to protest a fuel subsidy removal by the then federal government led by president goodluck jonathan. Pdf discussion on subsidy removal from nigerian economy. The decision by the government to out rightly remove the subsidy on fuel ignited series of arguments and. The incorporated trustees of kingdom human rights foundation international, has dragged the acting president, prof. Chapter 8 impact of fuel subsidy removal on government. The small number of such studies led to inclusion criteria being widened to include qualitative research published within the time frame as well as select seminal studies published outside the time frame. Pdf deregulation and antisubsidy removal strikes in. What is the extent of the effect of subsidy removal on poverty. Complete removal of the subsidy did not continue for long, with the nigerian government reinstating a fuel subsidy to maintain a market price of 97 naira per liter shortly thereafter. The study investigated the effects of petroleum subsidy removal on government expenditure in nigeria.
Impacts of removing refined oil import subsidies in nigeria on poverty abstract the crude oil sector in nigeria contributes substantially to the economy. For example, when the government of indonesia dramatically raised fuel prices twice in 2005thereby escalating the prices of food and commoditiesdemonstrat ors took to the streets throughout the country, with mobs. 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. Impacts of removing refined oil import subsidies in nigeria. 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. Delivery of membership polling on the fuel subsidy removal to naccima. Immediately the first oil field was discovered in 1956 at. In the lagos metropolis the questionnaire was administered in the following locales namely. Compensation mechanisms for fuel subsidy removal in nigeria the compensation measures would have to be implemented without political interference or discrimination based on ethnicity, religion, gender or any other bias. This is when the national economic council nec headed by vice president namadi sambo decided that the government should finally remove the subsidy from january 2012. Therefore, subsidy removal will only make consumers. Chasing water falls subsidies in recent years have experienced largescale civil unrest15. Apr 26, 2014 the apc had on march 11, in a statement by its spokesperson, lai mohammed, said the petrol scarcity being witnessed across nigeria was a plot by the federal government to cut subsidy.
Removing the subsidy on fuel is one of the most contentious socioeconomic policy issues in nigeria today. The impact of gasoline subsidy removal on the transportation sector in nigeria. Home economics summary, conclusion and recommendation in nigeria oil sector and fuel subsidy removal summary, conclusion and recommendation in nigeria oil sector and fuel subsidy removal economics. Nigeria, fuel subsidy, poverty, income distribution, economywide framework. The impact of kerosene price subsidy removal on households. Research hypotheses the following hypotheses were formulated for this study.
Nigeria is a young democracy with an 11year history of successful democratic regime change after more than 30 years of military rule interrupted by five years of civilian rule. Consequences of the january 2012 oil subsidy removal in. 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. Other alternative revenue earners such as agricultural and mineral resources were explored and their proceeds used to support and foot the bill of government expenditures.
According to reymond 2012 in toned that, for many nigerians, the fuel subsidy removal is merely a symptom of deeperrooted problems that exist within the system with a stagnant economy, high levels of corruption, little or no investment in health, education. Nigeria, like other oil exporting countries in the world has embarked on the policy of gradual removal of fuel subsidies since 1970s. The removal of fuel subsidy by the federal government as a deliberate policy aimed at conserving and maximizing the oil wealth of the words sixth highest petroleum producerexporter, has. In his reaction to the increase, comrade aliyu wabba said. Nwaoga and others published fuel subsidy removal in nigeria. Nigerians protest removal of fuel subsidy, 2012 global. The body which consists of the vice president, governors, strategic ministers and central bank of nigeria cbn, claimed that subsidy removal had become inevitable to avert the collapse of nigerian economy. Khalid siddig2, peter minor3, harald grethe4, angel aguiar5, terrie walmsley6 keywords. 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 across the board.
Working papers and other research publications were included if published by credible research organizations. Any officer in the steward cadre who acquires any of the qualifications specified forappointment to any higher grade is eligible for promotiontransfer to the grade. Protests took place across the country, including in the cities of kano, ojota, abuja, minna, and at the nigerian high commission in london. This, one of the rationale for removal of the petroleum subsidy is to correct these socials ills that continued to deep down the petroleum sectors.
This paper adopts a linear function approach to analyse the effect of fuel subsidy removal on the value of nigerian naira and local production in the country. The president goodluck jonathan administration has always made unpopular decisions which negatively impacted on the lives of the citizenry. The quick rise in consumer prices caused by the removal of the subsidy furthered the unpopularity of the decision. This study therefore differs significantly, because it intends to examine both the long and short run impact of fuel subsidy removal on the socio economic development of nigeria. A simulation of the removal of fuel subsidy and the performance of. Yemi osibanjo, the minister of education, adamu adamu and the federal ministry of education before the federal high court in abuja over alleged removal of christian religious studies, crs, from the academic curriculum of studies for nigerian schools. Fuel subsidy removal, which the federal government has effectively canvassed and lobbied for since may 29, 2011 appear to finally take off on december 12, 2011. Scheme of service pages 1 50 text version fliphtml5. Compensation mechanisms for fuel subsidy removal in. Lagos, the second most populated city in africa, is an uncharacteristic ghost town today. Introduction at least since the g20 summit in 2009, fossil fuel subsidy reform has been high on the international policy agenda, with widespread acceptance of the notion that fossil fuel subsidies are fundamentally. In this paper, an economywide framework is used to identify the impact of removing the fuel subsidy on the nigerian economy and investigate how alternative policies might be used to meet socioeconomic objectives related to fuel subsidies.
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