Subsidy in the economic sense exists when consumers of a given commodity are assisted by the government to pay less than the pump price per litre of petroleum products. On the other hand, fuel subsidy could be described as the but the question is, can the federal government convince Nigerians that fuel subsidy, if withdrawn will be judiciously utilized for the interest of the masses.
Showing posts with label Fuel Subcidy. Show all posts
Showing posts with label Fuel Subcidy. Show all posts
Tuesday, 8 April 2014
Fuel Subsidy in Nigeria: It's Origin
According to sector 16(2c) of the (1999 constitution of Nigeria, the country’s economic system shall not be operated in such a manner as to concentrate wealth or means of production in the hands of few individuals, and government shall manage and operate the major stay of the economy (FGN,1999). Under this circumstance, there is no way fuel subsidy withdrawn in Nigerian without violating this section of the constitution, since oil is this the major stay of the country’s economy.
In addition, this particular section reminds us that it is the primary duty of the government to control the national economy such that the maximum welfare, freedom, security and most importantly happiness of every Nigerian citizen are adequately secured and taken care of it is believed among renewed economist that income should be distributed evenly to narrow the existing gap between the rich and the poor. They argued that it is unfair for people to become rich just because they are lucky enough to either inherit wealth or intelligence (Ruffin and Gregory, 1983).Sequel to this situation, the market system emerged to allocate resources efficiently, but according to Aug (2009),
In addition, this particular section reminds us that it is the primary duty of the government to control the national economy such that the maximum welfare, freedom, security and most importantly happiness of every Nigerian citizen are adequately secured and taken care of it is believed among renewed economist that income should be distributed evenly to narrow the existing gap between the rich and the poor. They argued that it is unfair for people to become rich just because they are lucky enough to either inherit wealth or intelligence (Ruffin and Gregory, 1983).Sequel to this situation, the market system emerged to allocate resources efficiently, but according to Aug (2009),
Meaning of Subsidy
Subsidy is defined as money that is paid by a government or an organization to reduce the cost of producing goods and services so that their prices can be kept low (Hornby, 2005: 1476).In his own understanding of subsidy, Agu (2009:286), saw it as a payment made by government to producers of certain good and services, to enable them produce and sell at lower prices than they would otherwise.
Agu was of the view that policy helps to lower the market prices below the factor costs, so that consumers would have the privilege to pay use for the goods and services than they cost the producer to produce same.
In the same vein, Ezeagba(2005) believed that subsidy exits in a situation when consumers of a particular commodity in question. Ezeagba (2005) saw subsidy on the producers’ side: He saw it as the payment to producers of certain commodities by the government not to produce the prices of their product are less than breakeven point.
Agu was of the view that policy helps to lower the market prices below the factor costs, so that consumers would have the privilege to pay use for the goods and services than they cost the producer to produce same.
In the same vein, Ezeagba(2005) believed that subsidy exits in a situation when consumers of a particular commodity in question. Ezeagba (2005) saw subsidy on the producers’ side: He saw it as the payment to producers of certain commodities by the government not to produce the prices of their product are less than breakeven point.
FUEL SUBSIDY REGIME IN NIGERIA AND ITS EFFECT ON BUSINESS UNITS
CHAPTER ONE
INTRODUCTION
1.1 Background of Study
Protest are being held all over the world against politicians in the financial sector for wrecking economics in Nigeria, the fuel subsidy not backed by genuine agenda to enhance business development is the source of grave concerns even among the proponents of free market reforms (Sagagi, 2011). Since the mid 1980s various forms of structural reforms have been introduced with the hope of diversifying the economy and improving living conditions.
Half a decade ago, the nation pledged to implement development programme in line with the global strategy for cutting poverty by half worldwide. The dept overhang was used to justify the government inability to fund development projects. On June 30, 2005, Nigerians celebrated the dept relief deal. In the package, $19, 293, 207, 575 was wiped out for the Nigeria’s debts profile.
INTRODUCTION
1.1 Background of Study
Protest are being held all over the world against politicians in the financial sector for wrecking economics in Nigeria, the fuel subsidy not backed by genuine agenda to enhance business development is the source of grave concerns even among the proponents of free market reforms (Sagagi, 2011). Since the mid 1980s various forms of structural reforms have been introduced with the hope of diversifying the economy and improving living conditions.
Half a decade ago, the nation pledged to implement development programme in line with the global strategy for cutting poverty by half worldwide. The dept overhang was used to justify the government inability to fund development projects. On June 30, 2005, Nigerians celebrated the dept relief deal. In the package, $19, 293, 207, 575 was wiped out for the Nigeria’s debts profile.
FUEL SUBSIDY REGIME IN NIGERIA AND ITS EFFECT ON BUSINESS UNITS
ABSTRACT
This research work intends to find out the fuel subsidy regime and the effect on the Nigeria business unit. The research instrument used was questionnaire with a reliability of 0.76% such high reliability was considered suitable for the study. It is also consistent of two sections to collect demographic data and opinions or responses of respondents. The questions in the research instrument were formulated in accordance to the research questions and were given to 100 respondents of all walks of life in Uvwie Local Government Area of Delta State. Some of the findings are: Fuel subsidy removal might be detrimental to the Nigerian people since it is an essential commodity and one of the determinants of the price system. Fuel subsidy affects the business in Nigeria positively be its removal might be detrimental to the Nigeria business units. Also the following recommendations among others were made: Government should set up adequate palliative, measure so as to cushion the effect of fuel subsidy removal. Also that the subsidy of fuel which is the mainstay of Nigeria economy should not be removal at once but in parts
This research work intends to find out the fuel subsidy regime and the effect on the Nigeria business unit. The research instrument used was questionnaire with a reliability of 0.76% such high reliability was considered suitable for the study. It is also consistent of two sections to collect demographic data and opinions or responses of respondents. The questions in the research instrument were formulated in accordance to the research questions and were given to 100 respondents of all walks of life in Uvwie Local Government Area of Delta State. Some of the findings are: Fuel subsidy removal might be detrimental to the Nigerian people since it is an essential commodity and one of the determinants of the price system. Fuel subsidy affects the business in Nigeria positively be its removal might be detrimental to the Nigeria business units. Also the following recommendations among others were made: Government should set up adequate palliative, measure so as to cushion the effect of fuel subsidy removal. Also that the subsidy of fuel which is the mainstay of Nigeria economy should not be removal at once but in parts
Monday, 7 April 2014
Effect of Fuel Subsidy Removal on the Nigerian Economy
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