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Audience Perception Of Federal Government Removal Of Fuel Subsidy In January 2012
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CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
For
some number of years, Nigeria enjoyed subsidy on petroleum products.
This came to an end on January 1st, 2012, after a declaration from
President Goodluck Jonathan that afterwards, the subsidy was to be
removed (Zaccheus, 2011). In Nigeria, the issue of appropriate pricing
of petroleum product has always been a controversial policy issue.
Successive governments have dealt with this problem to no avail. Suffix
to say that in Nigeria, subsidy removal implemented by governments had
always yielded negative effects on the citizens. According to Centre for
Public Policy Alternatives (2012), a subsidy by definition is any
measure that keeps the prices consumers pay for a good or product below
market levels for consumers or for producers above market. The essence
of having subsidy in place for products and services is that it has
direct positive impact on poverty reduction in the lives of the poor
masses who could not afford high prices (Nwaoga and Casimir, 2013).
Subsidies
were introduced in the Nigerian energy sector in the mid 1980‟s.
Something of a creeping phenomenon, the value of the subsidies has gone
from 1 billion in the 1980s to an expected 6 billion Dollars in 2011. In
this period the specific products targeted for subsidy have changed.
Diesel oil has had its associated subsidy redacted while petrol,
gasoline; kerosene continues to enjoy a 54.4 % subsidy over the
international spot market price at the Nigerian pump. Economists
believed that social welfare is maximized when the price of each good
and service is freely determined by the interaction of buyers and
sellers in open competitive markets. In practice and especially in
developing countries however, policy is often driven more by political
consideration than rational economic theory. The risk of social unrest,
street riots, and threats of civil war very easily make introduction of
market distorting policies justified. Nigeria as a case in point is
under increased pressures to grow its economy. Yet countervailing forces
of corruption, mismanagement of public resources and poor governance
conspire to frustrate efforts to sustain growth in the face of rising
population numbers and demands for a democratic dividend by the
citizenry (Centre for Public Policy Alternatives, 2012).
According
to Centre for Public Policy Alternatives, the justifications for
introduction or removal of subsidies vary markedly. In developed
economies Environmental issues, international trade and maintaining
competitiveness are the main drivers of policy. Whereas welfare, poverty
alleviation and election cycle politics largely underpin the reasons
for which subsidies are introduced in developing countries. A new factor
in the current mix of policy drivers is the renewed emphasis on
governance reform championed by the Bretton woods institutions-The World
Bank, IMF and the donor community. Lending urgency to this scenario is
the global economic downturn and consequent rationalization by lenders,
aid granting countries. As domestic demand for funds increase in these
countries amounts available for aid, FDI and subsidies diminish. The
consequence is a demand for greater efficacy in the economies of the aid
receiving countries of which Nigeria is one.
Furthermore, the issue
of fuel subsidy removal has torn this nation into two factions, the
government and the economic experts on one hand and the masses on the
other hand. The last fuel subsidy removal on 1st January, 2012 sparked
an uprising that almost led to a revolution; this attracted a lot of
public debate, opinions and reactions leading to NLC strike and
demonstrations in various states. Therefore, the major focus of this
study is to investigate audience perception of federal government
removal of fuel subsidy in Nigeria on January 2012.
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ABSRACT - [ Total Page(s): 1 ]The aim of this study was to investigate Audience perception of federal government removal of fuel subsidy in Enugu metropolis. Three main research questions were formulated for the purpose of this study and other sub questions aimed at prying into audience perception, causes and effects of fuel subsidy removal in Nigeria. Survey research method was used because of its convenience, reliability and cheapness. The study population was Enugu Metropolis. A total of 200 respondents were selected, usi ... Continue reading---
