Friday, November 4, 2011

Oil & Gas (4) : The Subsidy Conundrum

This Day
4 November 2011

Nasir El-Rufai

In 1962, according to Alhaji Adamu Wazirin Fika, the Government of the Northern Region faced a shortfall in revenues from falling world commodity prices. At a crisis meeting of the regional ministers, the first decision agreed on was that the salaries of the ministers should be cut by 50 per cent.

Today, even as the polity is becoming more heated due to worsening economic conditions and plans by government to remove the subsidy on petroleum products, President Goodluck Jonathan in his wisdom led a retinue of three executive jets and a contingent of some 120 people to Australia for the Commonwealth Heads of Government Meeting (CHOGM); the Head of the Commonwealth of Nations, the Queen of England, went by British Airways (BA).

This scene should set the tone as to whether the fuel subsidy exists at all and if government is justified in its plans to remove it. Does the Federal Government truly provide a subsidy on petroleum products consumed? If there is, should it be removed at this point? Why not? These are just a few of the myriad of questions bothering the minds of most Nigerians on this issue. What then is subsidy? Does it exist? If so, is it justified? In what ways can the interest of the ordinary Nigerian be best protected as far as the subsidy conundrum is concerned?

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