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Nigeria: Protests over removal of fuel subsidy
Most people in Nigeria live on less than $2 a day and many, the poor and well-off car owners alike, see cheap fuel as the only tangible benefit they derive from an oil-rich state where corruption bleeds billions of dollars from state coffers.
Critics say wealthy politicians could have found savings within government first and tackled oil industry corruption, before imposing a sharp hike in fuel prices on the public.
But Nigeria’s oil sector has been distorted by the subsidy.
Until the new pricing regime came in, economists say there was no incentive to invest in its oil refineries and reverse disrepair caused by decades of corrupt mismanagement.
That means that despite producing 2 million barrels of crude every day, the country is forced to import costly refined fuel.
The subsidy also encouraged smuggling into neighbouring nations like Benin and Cameroon where fuel is more expensive.
The government estimates it will save 1 trillion naira (US$ 6.2 billion) this year by eliminating the subsidy.
