The simplest perception of nigeria's fuel subsidy reveals one startling fact: that the nigerian government does not need to subsidise petrol at all if they reject corruption and sleaze as a way of life 1) definition to subsidise is to sell a product below the cost of production. The senate on wednesday, slashed the allocation for petrol and kerosene subsidies presented by the ministry of finance in the medium term expenditure he said that many countries had survived with fewer resources, adding that nigeria must look away from relying on oil and spending on oil wistfully'. The united states, yesterday, disclosed that nigeria's inability to eliminate subsidy on petroleum products and failure to hands off the fixing of electricity tariffs is hampering the provision of critical social infrastructure in the country. Still on fuel subsidy in nigeria by rahma oladosu the general issue of perennial scarcity of petrol in the country appeared to have been permanently resolved on may 11, 2016, when the federal government introduced a new pricing regime that increased the pump price of petrol from n86 per litre to n145 per litre. The federal government on wednesday announced the removal of subsidy on premium motor spirit,pms, otherwise known as petrol, meaning that nigerians will now have to buy the product for n145 per litre before now, the vice president, prof yemi osinbajo and the minister of state for.
Petrol stations in saudi arabia charge the equivalent of only 48 fils the international energy agency (iea) estimates that in 2010, governments worldwide spent $409bn on subsidising petrol consumption, increasing carbon dioxide emissions by 47 per cent only 8 per cent of the subsidies. Subsidies are used to cushion the price effect of products or commodities or services to the consumer hence it is used to control price in an economy and ensure the consumer can afford such commodity this paper seeks to examine the removal of fuel subsidy in the nigerian petroleum industry recently. The nation's fuel subsidy was mainly targeted at supporting poor individuals, households and other stakeholders to meet their fuel needs, thus enabling them to contribute towards the development of nigeria's economy.
The government's heavy subsidies for petrol are thought to have cost $16 billion last year president goodluck jonathan tried to abolish fuel subsidies in january but chose nigeria has a mixed record in privatising state companies anything in nigeria to do with oil invariably becomes a political dogfight. There will be no subsidy regime in petrol and diesel, oil minister dharmendra pradhan said subsidies are anti-poor subsidy should be given only to needy persons and not to people who can afford, he said, indicating that auto fuels are being mostly consumed by people who can afford them. The subsidy bill has spiked and as february elections approach, questions are being asked about the government's management of oil sales and earnings. Abuja - nigeria plans to cut subsidies on petroleum products by half next year after sharp falls in global crude prices, spurred the government to it also assumed further cuts to petrol subsidies in 2016 to 408,68 billion naira and 371,18 billion naira for 2017 nigeria's finance minister has proposed.
As at 2014, nigeria imported 886 million barrels of petroleum products, making it the 13th largest petroleum importer in the world for each barrel of petrol imported, nigeria government paid at least $8 per barrel, which tallied the total fuel subsidy payment to about $7 billion in 2014. The nigerian national petroleum corporation (nnpc) had been selling petrol at n145 a liter, but on thursday, november 3, the price rose to the subsidy, however, means that nigeria has less crude oil to sell, and nigeria relies on exporting crude oil abroad in order for it to be refined into petroleum. The surge in international oil prices has led to petrol prices being hiked for the fourth time since december and thrice in case of diesel petrol price was hiked by 42 paisa and diesel by rs 103 a litre, last midnight.
The nigerian petroleum products pricing regulatory agency (pppra) determines the daily and monthly subsidy rates as follows: the subsidy is determined daily and monthly by pppra based on the gap between the expected price of imported fuel, including margins, and the pre-established, regulated, domestic price. The federal government's daily spending on petrol subsidy may have risen to n206bn as the pricing template for the product by the petroleum products pricing regulatory agency since the country's refineries is in a poor state, nigeria relies more on the importation of fuel needed in the country. Nigeria- the subsidy on petroleum products on wednesday recorded a sharp increase to n1227 per litre it was n847 on monday punch reports: subsidy on premium motor spirit, otherwise known as petrol, has increased to n1227 per litre, the highest since the federal government reduced the. Oil marketers in nigeria are calling for payment of outstanding debts owed by the federal government philip anegbe an, oil and gas and cement analyst at.
The executive secretary of major oil marketers association of nigeria (moman), mr obafemi olawore, had disclosed at a media briefing last week that the to revert back to n65 and withdraw 80% of the subsidy in march 2012, meaning that petrol would sell for n120 if by the 1st of april 2012. The daily subsidy on petrol had on december 29, 2014 plunged to 90k per litre following the steep decline in the global prices of crude oil, from which petrol is nigeria, africas top oil producer, relies on importation for most of its fuel needs as the countrys refineries are in a poor state the bulk of the. Anger as nigeria scraps petrol subsidies by increasing prices to curb ongoing fuel shortage. Malaysia plans to end decades-old petrol and diesel subsidies from next month in an attempt to save billions of dollars and reduce its fiscal deficit earlier this week, neighbouring indonesia increased fuel prices by more than 30% after cutting subsidies in an attempt to save more than $8bn next year.
Nigerians however see the subsidy as their only benefit from the nation's oil wealth the government says more than $8 billion was spent in 2011 on nigeria refines very little of its crude despite being a major oil producer and opec member, a situation blamed on corruption and mismanagement, forcing. Nigeria is the biggest producer of oil in africa, yet it is revealing that the same fuel that sells for n65 per liter (with payment of subsidy) in nigeria goes for just n4 to n5 in venezuela, the venezuelan ambassador to nigeria, enrique fernando arrundell, explains. Nigeria has for many years subsidise the pump/retail price of petrol the absence of functioning refineries to provide petrol to oil marketers has made the country this time around, president buhari who is seen to be credible might be having a soft-landing for daring to remove subsidies on fuel price.