Right back from our former president GEJ administration in 2012 there have been removal of fuel subsidy but i never knew what subsidy meant i check my dictionary,googled it but yet i dont just understand and now Buhari has done it agai.

Can Somebody For Gods Sake Explain The Term "Subsidy" For Me In A Lay Man Language.

Yes, i m with you too. someone should tell us please?

Crude oil is yam, Federal government is the farmer. FG uproots yam (crude oil) exports and sell it. We then import pounded yam (petroleum products).

Let assume we bought poundy at 140, government will subsidize it by paying half and we pay the rest.

Removal of subsidy on PMS by Federal government simply implies that market forces will now determines price of the commodity (Eco 101).

Also, the #145 price is just a price control mechanism. NNPC mega stations and other major marketers will still sell below the price, while independent marketers can sell at any amount but not above #145.

Since marketers are now free to source for forex by any means to bringing in the product without hindrance, it means the product will soon flood the market and competition will force the price to drop down. Watch out for this, before the end of the years, it will be so for as low as 120 naira per litre.

Let us patronise NNPC stations and co

This is the result of total deregulation we all asked for.
Also, the benefits include

Solving the recurrent fuel scarcity crisis by ensuring availability of products at all locations of the country

Reducing hoarding, smuggling and diversion substantially and stabilise price at the actual product price

Ensuring market stability and Improves fuel supply situation through private sector participation

Even with the new price regime, Nigeria would remain one of the cheapest fuel markets in Africa and this could even be lower once competition takes effect. Likelihood of smuggling to Neighboring countries will also be significantly reduced with the new price regime.

Aside all d above, subsidy is like negative tax. FG has spent over 10 trillion naira on subsidy payment over the past few year. This money could be used for other developmental projects.

The most funny part is that, the payment of subsidy on PMS only benefit the rich far more than the poor...

Paulpaulpaul:
Crude oil is yam, Federal government is the farmer. FG uproots yam (crude oil) exports and sell it. We then import pounded yam (petroleum products).

Let assume we bought poundy at 140, government will subsidize it by paying half and we pay the rest.

thanks this has been very helpfull so the federal Govt is nt paying any money on our behalf for pms.


God Just Come To Nigerians Aid

in a plain language subsidy is part payment (not full payment) for a product by government. the benefit of the government paying subsidy is to ensure that consumers of such product pay less for it. so when government give subsidy on a particular product, it means that the government has paid half d price of that product.
Example if government pays subsidy for a product (let's say for PMS) the consumer will pay less for the PMS because the government has paid half the price.
but if the government decide to stop paying subsidy on a product (subsidy removal) it means that the consumers of such product will pay high because government is no longer paying half. now relate this to the fuel subsidy removal.
hope u get it now.
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everybody is blaming the federal government for removing subsidy but there is a reason for the removal of subsidy on PMS.
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the minimum wage of labour was N18,000, until labour decided to ask for an increase in minimum wage from N18,000 to N56,000, after much deliberation the federal government accepted their request. for this reason government has decided to remove its subsidy on PMS because FG claims it cannot increase minimum wage at the same time pay subsidy on PMS. this is why the price of PMS inflated. now the FG puts labour on a dilemma. subsidy on the right hand and increased wage on the left hand, labour has to pick one. FEDERAL GOVERNMENT IS WISER THAN THEM.
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I hope you understand the concept of subsidy now.