Fuel Subsidy Policing: Evaluation, Challenges and Prospects in Nigeria

Abstract

Nigeria is blessed with vast mineral resources, notable amongst them being the oil and gas reserves. The country has the largest reserve in Africa and ranks as one of the top oil-producing countries in the world. However, there is little or no positive impact on the lives of the citizens due to corruption, mismanagement, smuggling, monopolies, inefficiency, administrative bottlenecks, and unfaithful fuel subsidies. Subsidy has far and away become the most socio-economic policy issue in Nigeria. Subsidy varies, with the most alarming and germane being fossil fuel subsidies due to their overwhelming importance as the major source of economic activity in Nigeria. Like other developed countries, while we have practiced the use of fuel subsidies for some decades, the promise of their removal by the previous government has failed due to some uncertain and prohibitive factors. A larger amount of government revenue has always been used to finance fuel subsidy removal, leaving other sectors to suffer from low allocation financing. This vista discourses the concept of fuel subsidy, its history, the line of policing, the arguments for and against its removal, the Nigerian journey so far, a brief comparative analysis, and concludes by proffering recommendations for the vexed economic issue.