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The economics of Nigeria's petroleum products' subsidy removal debate: Who is right? Who is wrong?
Author(s) -
Asekunowo Victor O.
Publication year - 2012
Publication title -
opec energy review
Language(s) - English
Resource type - Journals
eISSN - 1753-0237
pISSN - 1753-0229
DOI - 10.1111/j.1753-0237.2012.00222.x
Subject(s) - subsidy , economics , spanish civil war , administration (probate law) , development economics , public economics , political science , law , market economy
The petroleum products' subsidy removal proposal slated to take effect from early 2012 in Nigeria has generated a lot war of words between governments in the country, the Nigerian Labour Congress and the civil society. This war of words has, on occasion, regrettably degenerated into violence, culminating in loss of lives and properties. This paper looks at the economics behind the positions taken by the groups on both sides of the divide. The review conducted revealed that the arguments presented by each side cannot be adjudged to have dwarfed the other. However, the review also revealed that the Nigerian poor, who probably due to initial distribution or some other vicissitudes of life, would suffer immeasurably if the subsidy is totally withdrawn. This paper therefore argued that a middle ground, partial withdrawal of subsidy policy must be adopted in which the administration of the scheme, if reformed, would make less targeting errors, i.e. subsidy should be better targeted. This way, the already unimpressive Human Development Index of Nigeria would not worsen.