Nigeria Minister of state for Petroleum Resources and Group Managing Director of Nigerian National Petroleum Corporation, Ibe Kachikwu announced the removal of Premium Motor Spirit (PMS) popularly known as petrol on Wednesday 11, 2016. Which now sell for ₦145 Per Litre.
The last administration of President Goodluck Jonathan wanted to remove oil subsidy and made the announcement on January 1, 2012 which was greeted with nationwide mass protest majorly in Abuja, Kano and Lagos state which prompt House of Representative to passed resolution for Federal Government to revert the decision and after more pressure from Labour Unions and Civil Societies the Federal Government decided to partially removed it by increase the Oil price from ₦67 per litre to ₦96 per litre.
But what are the real causes for removal of oil subsidy? Nigeria Government has been paying over $8 billion for oil subsidy yearly and this are been characterized by corruption. Oil subsidy in Nigeria has become a fraud and the stakeholders involves has been using this to defraud the country of her resources. Oil marketers has been receiving subsidy on the premium motor spirit (fuel) which they never supply or bring into the country and even on the one they supply and been paid subsidy on they end up diverting the product to black market or even taking it to another country to sell and sabotaging the effort of Nigeria government.
Nigeria is one of the major producer of crude oil in the world but the country has failed to bring in investors to build refineries and produce enough of this products for the their citizens to consume. The three refineries in the country are producing below their capacity and Nigeria need to import refined oil products. Crude oil is Nigeria major revenue and Crude Oil price has fall at international market below $40 per barrel and Nigeria government can’t afford to pay oil subsidy any more on the fuel Nigerians are not consuming or fuel that was only supply on paper.
The present administration of President Muhammadu Buhari reduce the oil price from ₦87 per litre to ₦86.5 per litre which was only enjoy in major cities in Nigeria (Abuja, Lagos and Port Harcourt) but fuel in been sold at exorbitant price in other part of the country ranging from ₦150-₦300 per litre. The question is this, is Nigerians really benefitting from oil subsidy? Crude Oil can no longer sustain the economy of Nigeria and Nigeria government as matter of urgency needs to diversify her economy to raise her revenue base. The money paying on subsidy can be used for development project and building of social amenities.
Nigerians are will really benefitting from oil subsidy? This are some of the sacrifice we must make has a Nigerian. We soon get over the hardship of the oil subsidy removal. Oil marketing and competition will stabilize the price of oil very soon is matter of time and strongly belief there is light at the end of the tunnel.
By Ayodele Seun
Source:http://dnaijapolitics..com.ng/2016/05/oil-subsidy-removal-is-timing-right.html