Sunday, 20 July 2008
Nigeria considers removing oil subsidies
The Nigerian Government is looking at a systematic removal of the N1.5 trillion subsidy for petroleum products. Abolishing the subsidy over night, however, could prove too difficult to do. A market approach to pricing is definately needed. The current capacity of petroleum production needed for local consumption is 30million barrels per day, but the refineries in Nigeria are only capable of producing about 360,000 barrels out of their capacity of 445,000 barrels.
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2 comments:
I am not sure how it will work. The Nigerians consider it "cheap" fuel as a "birthright". The Govt is caught between a rock and a hard place. Removing subsidies means higher cost of living for Nigerians which could be politically explosive. The govt may not be entrenched enough to handle a fall out from higher oil prices.
Yes, the 'devil is in the detail'.
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