CAUSES OF THE JANUARY 2012 REMOVAL OF OIL SUBSIDY IN NIGERIA: PANACEA FOR SUSTAINABLE DEVELOPMENT OF NIGERIA
Odoh Patrick Abutu
Department of Public Administration
The Federal Polytechnic, Kaura Namoda, Zamfara State, Nigeria
Email: odohpatrick@ymail.com
ABSTRACT
Successive governments in the past particularly the administrations from the period of oil glut have been subsidizing petroleum products. As a result of the above, government have been paying for every litre of oil that is consumed by any individual in Nigeria whether a foreigner or a citizen alike. This development has led to increase in government expenditure resulting in deficit budgeting over the years. The government became worried over the situation and eventually came out with the concept of oil subsidy removal so as to reduce cost of running the government and use the accruing funds to provide essential and social amenities to the larger citizenry. Attempts by other administrations to remove the subsidy fully failed until 1st January 2012 when President Goodluck Jonathan totally removed the subsidy on petrol. However, due to protracted strike action of the organized labour coupled with the suffering being encountered by the masses as a result of the strike action, the Government slightly reduced the full removal of the subsidy. In the light of the above, this paper examine the causes of the removal of subsidy in January 2012 and recommends that the government should fully remove the subsidy because even without the total removal, the consumers are purchasing the products even more than the N142 which was the official price for the full removal of the petrol and also that the advantages of total removal outweighed the demerits of continuous subsidizing of the oil.