SUBSIDY IN THE DOWNSTREAM OIL SECTOR AND THE FATE OF THE MASSES IN NIGERIA

Abstract

Subsidy exists when consumers are assisted by the government to pay less than the prevailing market price of a given commodity. In respect of fuel subsidy, it means that consumers would pay below the market price per litre of petroleum product. But in contrast, the prices of petroleum products in Nigeria have been increasing consistently since the inception of withdrawal of fuel subsidy in 1986. In addition, the proceeds from the removal have never been translated into the development of basic infrastructure that could ordinarily add value to the lives of Nigerians. This situation notwithstanding, some Nigerians continue to clamour for further removal of subsidy in the downstream oil sector in Nigeria. It is against this backdrop that this paper seeks to examine the issue of fuel subsidy and find out the extent to which it has impacted on the lives of the masses in Nigeria. During the course of the paper, it was discovered that a group of dissidents and saboteurs otherwise called “cabals”have been working against the functionality of the existing refineries and also make frantic efforts to undermine the building of new ones. According to the paper, it is done in order to engage in fuel importation for the purpose of satisfying their selfish desires. To ameliorate this ugly situation, the paper believes that further importation of fuel should be stopped through building of new refineries and the ailing existing ones revamped without delay