1.
TO REDUCE
CORRUPTION IN THE DOWN STREAM SECTOR
The Nigeria oil industry is hitherto fraught with
corruption and sharp practices. Government agencies charged with oversight
function over the industries are compromised with bribes. This, one of the rationale for removal of the petroleum
subsidy is to correct these socials ills that
continued to deep down the petroleum sectors. According to the statement made by the finance
minister and coordinator of subsidy removal, Dr. Ngozi Okonjo Iweala. “ The removal of oil subsidy
will drastically reduce corruption in
the
down stream sector.” Moreso, deregulation will also help to end the waivers
enjoyed by powerful “cabals” at the expense of the Nigerian people. In addition
that vast majority of Nigeria will also gain as the proceed will be redirected
into safety nets wand other
identifiable social intervention as well as provision of sorely needed
infrastructure projects nationwide.
2.
PROVISION
OF BASIC AMENITIES
Because of the huge sums of money spent on oil
subsidy, government is unable to provide basic amenities that would impact more
directly in the lives of the citizens. However, if half of the money spent oil subsidy is channeled
to other sectors of the economy, Nigeria would have been better for it.
Consequently, the money saved from subsidies will be used to improve
infrastructure, building good roads and bridges, fund agriculture, education and health sectors.
3.
TO REDUCE
GOVERNMENT DEBT
According to the words of the Central Bank
Governor, Malam Sanubi, one of the long
term benefit of the withdrawal of the subsidy is the reduction of government debt and at least help direct that dept to the finance of infrastructure that
should create jobs and more
inclusive growth. However, it is important to note
that Nigerian government often borrow to enable it finance this oil subsidy so
as to make the petroleum pump price affordable to a few rich Nigerians who
operate or control some of the devices which actually consume the petrol. In
other wards, majority of Nigerians in their various villages consume little or
non of the petroleum product we are talking about here. For example, it is
those who own cars, power generating plant, travels from one place to another
by any of the means through which petrol is consume oil including those who
cook with cooking gas that are actually benefiting from the petroleum subsidy
and these people are in their minority in the population of the country.
4.
TO INCREASE
INVESTMENT /INDUSTRIALIZATION
Another
important reason for removal of the petroleum subsidy is to encourage
investment. It could be noted that the removal of the subsidy will bring in
investment into the down stream sector and help build refineries and
petrochemical plant
Furthermore,
the transparency and competition which will follow the deregulation of
petroleum industry, will in turn, attracts inv estors, leading to the
establishment of private refineries across
the country and this will go
along way to help Nigeria meet up with its local demand and have surplus for export. In addition, since the removal of
the petroleum subsidy is perhaps sure way for transformation of the petroleum sector, genuine investors will be willing to
invest in the oil industry , and our economy will not suffer lose.
5.
TRANSFORMATION
OF THE PETROLEUM SECTOR
Allot
has been said of corruption in this nation, and the time is now to effect the
change we need. Reformation of the oil sector which is the
life wire of the nation could take the lead. Over the
years, the petroleum industry
alone has drain down trillions of naira from the resources of these poor
citizens
with little or nothing concrete to show
for it. To me, it does make sense to
continue in support of
such unprofitable program. Thus, this trillion of naira that government spend in financing the oil industry should be saved and redirect
to other sector that are of more beneficial to poor and complains of non
delivery of government services and youth unemployment will drastically
reduce.
6.
TO INCREASE OUR FOREIGN DESERVE AND SAVINGS
With subsidy removal, Nigerian, government will get to keep more of
the money raised from sales of its petroleum product and savings made on
its foreign earnings, this will uplift the countries foreign reserves and greatly improves our
ratings by international agencies
7.
FOR
ENHANCEMENT OF THE COUNTRY’S NATIONAL DEVELOPMENT
It
is obvious that if Nigerian government continue to spend such hoofing sums of
money on making petroleum product affovtable
to the few rich citizens of the country, other sectors, such as
education sector, health sector, agricultural
sectors and infrastructure development will drastically suffer deceit. Hence, if the
three pillars of sustainable
development such as social equity, economic growth and
environmental development must grow, there must be exchange of priority from petroleum subsidy to these named areas
because no nation can gain or achieve
true development spending so much
of its money on something with so little potential to
impact on the society generally. Furthermore,
fuel subsidy also affect the economy by artificially lowering the price of
certain types of energy, subsidy encourage over consumption and inefficient use
of those resources. Moreso, Nigeria
government buy most of its fuel at international market prices and selling them
more cheaply domestically, this often
results in huge losses for the NNPC
that must be funded by the government (that is the tax payers), resulting in a
major financial burden on the whole economy.
8.
TO ESTABLISH MORE REFINERIES AND CREATE EMPLOYMENT OPPORTUNITIES
It is noted that since 2000, government of
Nigeria had issued 20 licenses for refineries, but none was been built for
these reason. This is not unconnected to
the financial and structure imbalance created in the huge sums, of money
expended on petroleum subsidy. However, it is obvious that with subsidy
removal, Nigerian government can now use the money saved from subsidy to build
refineries which will inturn provide enormous opportunities for employments of
our jobless youths. In
line with the above, it could be argued that subsidies have led to a
deterioration in the financial
situation of state owned energy companies thereby negating increase in the
establishment of production industries and hence necessitating unemployment and
under investment in infrastructure.
9.
TO REPAIR
INFRASTRUCTURAL DECAY IN THE COUNTRY
If you look at
the poor state of electricity supply in the country, the dilapidating nature of
the nations road network, the sorry state of water supply not to talk of
education, health and agriculture and even, security, you will agree with me
that removal of petroleum subsidy is most sacrosanct. As keeping these glaring
sectors in abeyance at the instance of making petroleum product prices
affordable will rather place the country
at the position of “every year
developing and never develop a nation”.
10. TO MAKE WAY FOR TRANSPARENCY AND COMPETITION IN THE
OIL INDUSTRY
When petroleum
subsidy which is rife with corruption and unhealthy practices is no longer
there transparency and healthy competition will return to the petroleum
industry. This will result to long-term
investment into the downstream sector and encourage building of private
refineries and petrochemical plants hence, portents better fiscal management
and a structural adjustment leading to industrialization and development.
Having this in mind, removal of petroleum subsidy could be a remedy to the
massive unemployment on going in the country