Nigeria’s oil subsidy programme has unwittingly become a drag on the economy. When the price of the commodity rises on the international market, revenue rises, but this gain is more of a paper entry. It is taken away by a higher subsidy, which under the current arrangement, the government must concede so that Nigerians can afford to buy refined products which are imported at higher costs. When the price of oil goes down, the government’s revenue similarly falls, but subsidies still have to be given. In the first quarter of this year, the government spent about N197.74bn on subsidy payments, according to official figures. As the price of crude oil surged past $71/barrel, it became clear this would push prices of refined products to higher regions of subsidy requirements to make them affordable at home. This is the reasoning. It is also the fear within official circles, where this […]