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Nigerian Fuel Subsidy Policy:Implications for Sustainable Development

The government of Nigeria’s removal of fuel subsidy on petroleum products (Premium Motor Spirit) – through her regulatory agency, Petroleum Product and Regulatory Agency (PPRA) on January 1, 2012 – increased the unit cost from 65.00 NGN (0.40 USD) to 143.00 NGN (0.90 USD). This development came on the heels of a declaration of State of Emergency in some parts of the Northern Region on December 31 after weeks of terrorism and sporadic bomb blasts mainly in churches and other public spaces.

In the official release which read, ‘Following extensive consultation with stakeholders across the nation, the Petroleum Products Pricing Regulatory Agency (PPPRA) wishes to inform all stakeholders of the commencement of formal removal of subsidy on Premium Motor Spirit (PMS), in accordance with the powers conferred on the agency by the law establishing it, in compliance with Section 7 of PPPRA Act, 2004’. Whilst the proposed policy promises sustainable development across all sectors of the economy, observers criticize the capacity and political will of the government to meet this promise after many decades of bad leadership and institutionalized corruption.

ThistlePraxis Research examines the effects of this policy on Nigeria’s economy beyond the sudden inflation that already plagues the system, and the implications for Sustainable Development in a report, Subsidizing Sustainable Development: The Nigerian Case Study to be published in two (2) weeks.

We invite you to contribute to this report by answering the following questions:

1. What is your opinion about the fuel subsidy removal in Nigeria?

2. What will be the short term effects of the policy on your work?

3. How do you envisage the long term effects of the policy on your company and your employment?

4. What are your expectations from: government and your employer(s)?

5. What measures, if any will you take in cushioning the effects of the policy for your social and professional life?

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