Subsidy Crisis Who Benefits The Most

In the first week of January 2012, Fuel Subsidy was removed in Nigeria, making fuel per litre from $0.40 to $0.86. The point is to save money so it could be use to build more infrastructures to better the lives of the common man. In debating the merits of Nigeria’s fuel subsidy it is important to understand who benefits the most from the program. Contrary to popular belief, it is the rich not the poor who disproportionally benefit from Nigeria’s fuel subsidy. With the government subsidizing the market to keep domestic fuel prices artificially low, it is those who consume the most that have a greater benefit from the subsidy. Nigeria’s poor rely primarily on public transportation as such their per capita fuel consumption is significantly less than the country’s rich, who generally use private vehicles. Neighbouring countries also benefit significantly from Nigeria’s fuel subsidy through smuggling. No matter the crisis, certain people tend to benefit from it and this crisis was no different.

Anti-Subsidy DSC_5744e

Kelvin O’D (Middlesex University Dubai)


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