Petroleum Motor Spirit Subsidy Removal in Nigeria: Issues and Challenges

Abstract

Ignorance of the masses is widely believed to be majorly responsible for the sharp public reactions and demonstrations against the removal of subsidy on pump price of petroleum motor spirit by the Federal Government of Nigeria at the very beginning of 2012. This cross-sectional descriptive study employed primary data generated from
petrol users (bus/taxi drivers, bi- and tri-cycle commercial transport operators, civil servants, and others) by use of questionnaire distributed in Enugu metropolis. Five hypotheses were tested, using the chi-square statistical model. Significant findings include: the government adequately consulted with the key stakeholders of the
nation before embarking on the removal; no time would be suitable for the subsidy removal in order to avoid protest; subsidy is not a democratic dividend or benefit to the masses; majority of Nigerians sided with the reversal of subsidy removal policy for a stepwise deregulation implementation; and the Government should repair the
existing refineries and build additional ones to increase domestic supply. The following recommendations were proffered: increasing in the supply of fuel in the NNPC designated filling stations; reversing the classification of over invoiced fuel imports which were erroneously nomenclated as subsidy to cure the misguided psyche of the electorates who ardently believed that there was benefits accruing to them; restructuring our educational curriculum contents to impart elementary knowledge on oil and gas studies, and reversing the public perception of government development policies by publicizing some of the implemented campaign promises with less rhetoric, and instituting adequate management and accounting control checks and balances to
ensure proper verification of procurement vouchers and procedural compliances. Vacate the business interferences and save time for oversight and control functions which further create conducive environment for business deals.