The political economy of subsidy in Nigeria: the Case of Fuel Subsidy Removal 2003-2012

Abstract

The paper examines the political economy of subsidy in Nigeria with particular reference to fuel subsidy removal from 2003-2012. This is informed by the nation's inability to track the rising tide of economic hardship that has negatively affected the living standards of Nigerians which has spurred policy makers to tow liberal line to over-haul and revamp the economy so as to have economic growth and development in the shortest possible time and in the best interest of all Nigerians and by extension places the country on the same page with advanced countries of the world which will help to reduce our dependence status. The paper tries to examine the impact of deregulation in terms of the price of petroleum products on the lives of Nigerians and discovers that it is too high, unaffordable and unbearable which is completely antithetical to the principles of good governance. The author observers that since Nigeria is trying to diversify her economy and yet relied heavily on crude oil, proceeds from it should be used to encourage industrialization of agriculture and other sectors of the economy that will bring about all-round development in the country. Any measure put in place to regulate the down- stream sector of the Nigerian National Petroleum Company (NNPC) is an effort in the right direction that will meet the felt needs, yearningS and aspirations of Nigerians whom these products are meant to serve. Clearly the objective of the paper is to make this essential product available and affordable to all Nigerians at all times. The framework of analysis adopted in this work is neo-liberal perspective. The methodology used in this work succinctly links abstract to introduction, history of subsidy removal in Nigeria, tables, conceptual clarification, deregulation and good governance, theoretical framework, deregulation and Nigerian economy, objective of the paper and conclusion and recommendations