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TWELVE REASONS WHY SUBSIDY REMOVAL DECISION IS RIGHT

01
Trillions of naira have been spent by successive administrations , a corrupt, largely abused regime that has ended up in private pockets, creating overnight billionaires who continue to walk free

02
Petrol subsidies over the years have caused supply disruptions and engendered inefficiencies in their management

03
Under the current low oil price environment, dwindling oil revenue and shortage of foreign exchange, deregulation would partly reduce the pressure on the naira and foreign reserves

04
With deregulation, importers of petrol can source for their dollar requirements from autonomous sources, which would ease pressure on the naira and foreign reserves

05
Diversion of products will be minimised, as there will be no incentives for marketers to divert petrol to markets where they are guaranteed higher prices

06
The removal of subsidies will attract critically needed private sector investment in the downstream oil sector and lead to the construction of new refineries

07
As greenfield refineries come on stream in the medium to long-term and NNPC partly privatises its plants under whatever arrangement it chooses to call it, Africa’s largest oil producer would transit from an importer of products to a net exporter of products and end the export of jobs to other jurisdictions

08
The end of subsidies will end crude oil swaps and other opaque trading arrangements that have cost Nigeria billions

09
Savings made by government will be used to develop critical infrastructure that would create jobs, and funds redeployed to subsidise productive sectors of the economy such as agriculture, textile manufacturing and SMEs (wise countries subsidise production, not consumption)

10
With deregulation and the attendant competition, marketers and NNPC will be forced to adopt best practices in order to remain in business

11
Competition will also guarantee that prices will inevitably stabilise and drop over time; US shale oil and new oil discoveries in other parts of the world mean that oil prices are unlikely to ever rise to $100 a barrel, which has a knock-on effect on the price of refined products

12
Realistically, the official pump price of petrol has largely been enjoyed by dwellers in major cities in the country. In the hinterland, where up to 60 per cent of Nigerians still reside, petrol, when it is available, is normally sold way above the regulated price


Source : http://naijakab.tk/TWELVE-REASONS-WHY-SUBSIDY-REMOVAL-DECISION-IS-RIGHT

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