"Oil subsidy means government is paying part of the cost of you purchasing a litre of petrol. This became necessary because we import petrol at international market price. At such price (Up to 300 Naira per litre), it will be too expensive for an average Nigerian. So government now said ok Capital oil (for instance), buy petrol and sell to our people at say 100 naira and we will pay you the balance of say 200 naira. That balance is the subsidy. Subsidy wasn't something that should have lasted this long. It was a short term measure put in place to ensure availability of the product till enough refineries are built to cater for domestic consumption at least. Unfortunately, none of that has happened for over 20 years now and what was supposed to be beneficial has now become a monster. The oil marketers collect money from govt and don't bring any oil....and sometimes when they do, they manipulate the availability and drive up the price. So they collect money from govt and still sell at prices higher than govt fixed price. SUBSIDY should be removed 100%. Removing subsidy will stimulate healthy competition (more people than just the govt accredited importers will be involved) such that even if the prices are higher, it will never be scarce and competition can also drive down the price. Again, the subsidy money can be channeled towards developing local refineries!"

Insightful write up.

Well said, well written! But the major issue which has arisen and still arising is how sure are we the subsidy money would be put into optimum & justifiable use for the good of the common Nigerian?
Subsidy is one concrete means Nigerians benefit from the government as fuel is widely used across all strata of the society.

Without mixing words I say a very big thank you for dat simple n clarifying explaination....am sure I cudnt really explain wat it was until now...thanks again

Arrowman:
"Oil subsidy means government is paying part of the cost of you purchasing a litre of petrol. This became necessary because we import petrol at international market price. At such price (Up to 300 Naira per litre), it will be too expensive for an average Nigerian. So government now said ok Capital oil (for instance), buy petrol and sell to our people at say 100 naira and we will pay you the balance of say 200 naira. That balance is the subsidy. Subsidy wasn't something that should have lasted this long. It was a short term measure put in place to ensure availability of the product till enough refineries are built to cater for domestic consumption at least. Unfortunately, none of that has happened for over 20 years now and what was supposed to be beneficial has now become a monster. The oil marketers collect money from govt and don't bring any oil....and sometimes when they do, they manipulate the availability and drive up the price. So they collect money from govt and still sell at prices higher than govt fixed price. SUBSIDY should be removed 100%. Removing subsidy will stimulate healthy competition (more people than just the govt accredited importers will be involved) such that even if the prices are higher, it will never be scarce and competition can also drive down the price. Again, the subsidy money can be channeled towards developing local refineries!"

that was what they told us then.... STORY

thank you !well explained

Arrowman:
"Oil subsidy means government is paying part of the cost of you purchasing a litre of petrol. This became necessary because we import petrol at international market price. At such price (Up to 300 Naira per litre), it will be too expensive for an average Nigerian. So government now said ok Capital oil (for instance), buy petrol and sell to our people at say 100 naira and we will pay you the balance of say 200 naira. That balance is the subsidy. Subsidy wasn't something that should have lasted this long. It was a short term measure put in place to ensure availability of the product till enough refineries are built to cater for domestic consumption at least. Unfortunately, none of that has happened for over 20 years now and what was supposed to be beneficial has now become a monster. The oil marketers collect money from govt and don't bring any oil....and sometimes when they do, they manipulate the availability and drive up the price. So they collect money from govt and still sell at prices higher than govt fixed price. SUBSIDY should be removed 100%. Removing subsidy will stimulate healthy competition (more people than just the govt accredited importers will be involved) such that even if the prices are higher, it will never be scarce and competition can also drive down the price. Again, the subsidy money can be channeled towards developing local refineries!"

Thanks a bunch for the explanation,Even a lay man can easily digest the take home message....I pray our government Makes wise use of Money to be generated from the acclaimed subsidy removal