National Youth Essay Competition entry
Published on: Mar 3, 2016
Transcripts - National Youth Essay Competition entry
Strategies for taking the benefit of oil subsidy to the
highest number of Nigerians
Ayogu Gideon Okechukwu
The beginning of wisdom is a definition of terms –Socrates
The expressed intention of the administration of President Goodluck Jonathan to remove
the existing subsidy on petroleum products has been one of the most discussed issues in
the Nigerian socio-political landscape ever since the idea was mooted in October.
Before we venture any further, it is instructive to fully understand the subject of this
essay. In the view of Todaro and Smith (2009), a subsidy is an assistance paid by the
government to a business or economic sector to prevent an increase in the prices of its
products while Agbedo (2011, p.46) opines that: “Petroleum subsidy means that a
fraction of the price that consumers are supposed to pay to enjoy the use of petroleum
products is paid by government so as to ease the price burden.”
THE SUBSIDY MUST GO
But after observation and analysis, when you find that anything agrees with reason and
is conducive to the good and benefit of one and all, then accept it and live up to it -
Prince Gautama Siddhartha
For the benefits of oil subsidy to get to the highest number of Nigerians, the subsidy has
to go. Only a few well-placed Nigerians benefit from the subsidy as seen in the recent
revelation by the Senate, which released the names of the beneficiaries of fuel subsidy
amounting to a grand total of N3.655 trillion from 2006 to 2011.
The princely sums that have been allocated to the subsidy over the years could have been
better spent in the execution of capital projects and development of critical infrastructure
that would have hastened Nigeria’s march to Vision 20:2020. While opposition to the
removal of the subsidy has been centred on the view that the move would impoverish
millions of Nigerians, it is worth stating here that, with efficient and conscientious
redeployment of the accruing wealth from the removal of the subsidy, those concerns
would be taken care of.
BENEFITS OF REMOVING THE FUEL SUBSIDY
Change always comes bearing gifts - Price Pritchett
Nigerians stand to gain a lot from the removal of the fuel subsidy or the deregulation of
the downstream sector of the petroleum industry, as it is otherwise known. Monye (cited
in Ikokwu, 2011) argues that the removal would benefit Nigerians because people will
import petrol and sell at market prices, there will be competition and supply and the
refineries will work again.
Ugwuanyi (2011, p. 15) also captures the benefits that would accrue with the removal of
the subsidy by stating that “with deregulation, private refineries will spring up in different
parts of the country. The situation would not only create employment but the price of
petroleum products would fall.”
At this juncture, however, the focus of this essay would shift to the locus of this discourse
which bothers on the strategies that would ensure that the greatest number of Nigerians
benefit from the removal of the subsidy.
THE WAY FORWARD
Success is simple. Do what's right, the right way, at the right time – Arnold Glasgow
The harsh effects of the proposed removal of fuel subsidy would be felt more keenly by
the Nigerian masses. In acknowledgment of that point of view, the researcher sampled
the pulse of the average Nigerian through a survey. The survey was structured as a
random sampling exercise due to the large population involved and it targeted at artisans,
students and traders, among others. These groups of people were exposed to short
Based on the analyses of the responses gathered and other personal inferences and
observations of this researcher, the following practical suggestions, it is believed, would
help take the benefits of oil subsidy to the greatest number of Nigerians:
1. A management team comprising credible Nigerians with representations from the
media, the government, trade unions, the corporate sector and other stakeholders
in the Nigerian polity should be set up to handle the funds accruing from the
removal of the subsidy and to supervise the subsequent process involved in the
redeployment of the funds to cushion the effects of the removal.
2. Part of the funds that would be freed up should be set aside for the provision of a
social security scheme for indigent Nigerians. This would grant the average
Nigerian access to free social and health services.
3. The above point is reliant on the availability of adequate data. Hence, it is
imperative to establish a national register in which the personal details and
particulars of potential beneficiaries of the social security scheme would be
4. The government should invest some of the accruing wealth in the reduction of
personal income taxes, Value Added Tax (VAT) and other tax rates borne by the
5. Since the removal of fuel subsidy is likely to cause a hike in the prices of food
items, the government should revamp the agricultural sector and make it grow
more food. This can be done by providing local farmers with loans, mechanized
tools, subsidized crop seedlings and fertilizers and other incentives that would
encourage greater output.
6. A nation-wide drive to eradicate illiteracy should be pursued which would ensure
that every Nigerian child receives free education up to secondary level. This
programme would be coordinated by the Federal and State Ministries of Education
in partnership with interested corporate and international bodies.
In conclusion, it must be said that transparency, probity, accountability and a sense of
dedication to the cause are necessary to the achievement of these strategies. This would
ensure that the greatest number of Nigerians benefit and would aid in actualizing the
transformational agenda of the administration of President Goodluck Jonathan.
Agbedo, O. (2011, October 22). How fuel subsidy removal will affect your finances. The
Guardian, p. 46.
Ikokwu, C. (2011, October 27). Monye: How fuel subsidy removal will benefit
Nigerians. ThisDay, p.23.
Todaro, M. P., &Smith, S. C. (2009). Economic development (10th Ed.). Addison
Ugwuanyi, E. (2011, November 1). Fuel subsidies gulp N3.566t in six years. The Nation,