NAME:

ODERI
NDEI
FEO
LUWA
C
LASS:
SS2
A
SUB
JEC
T:C
IVI
CEDUC
ATI
ON
TO
PIC
:PRO
SANDC
ONSO
FFUELSUB
SIDYREMO
VAL
I
NTRO
DUC
TIO
N
As ub
sid
yisfi
nan
cia
lsup
portpr
ovi
dedtobu
sin
esse
sina
neconomybyt
he
go
vernment
,oft
endur
i
ngrece
ssi
onsorot
herpe
ri
odsofl
owecon
omicgro
wth
.
Subs
id
iesi
nvol
vedi
rec
tcashpay
me n
ts,
butthe
ymi g
htal
sot
aketh
ef o
rmof
di
sc
ounts.
Fu
elsub
si
dyapp
li
est
ocompa
nie
sint
hepet
rol
eums
ect
or.I
tre
duc
estheo
ver
all
p
ri
cepeo
plep
aytobuype
tr
ole
umre
lat
edp
rod
uct
sbyref
und
ingt
heext
rac
ti
onand
i
mpor
ta
tio
nofth
eser
esor
ces
.
Thefue
lsu
bsi
dyha
sbe
enase
ri
ousi
ss
u ef
ors
eve
ral
year
s,wi
ths
omep
eop
le
c
all
i
ngfo
rit
sre
moval
ando
the
rsa
dvo
cat
ingfo
rit
sco
nti
nua
ti
on.
Rec
ent
ly
,th
ereh
asb
eenad
eba
tea
bou
tth
esu
bsi
dy'
si
mpa
cto
nth
eNi
ger
i
an
e
con
omy.
I
twasann
ounce
dbythef
ormerpr
esi
den
tMu h
ammad
uBuhar
ith
eremo
val
of
f
uel
subs
id
yinju
nebutwaspo
stpo
nedonApri
l27byt
hef
ede
ral
gover
nmen
tdu
ri
ng
t
heFed
era
lExe
cuti
veCo
unci
lmeet
ing
.
P
ROSO
FFUELSUB
SIDYREMO
VAL
Ther
earel
otofa
dvan
tag
eso
fre
movi
ngt
hefu
elsub
si
dy.Oneo
fthepr
imar
y
ad
vanta
gesofr
emovi
ngt
hef
uel
sub
si
dyi
sth
atitwoul
dfr
eeupre
sou
rcesf
oro
the
r
se
cto
rsofth
eecon
omy.
Wh ensubs
id
yisre
moved,
ther
ateatwhi
chdo
me s
ti
cref
in
eri
espr
odu
ce
pe
tr
ol
eump ro
duct
swil
lbere
duc
edandwil
lal
sor
educ
eNige
ri
a'
sdepen
denc
eon
i
mpor
tedfuel
.Thi
s,i
nt
urn,
coul
dboo
stth
ec o
unt
ry'
seco
nomyandcre
atej
obsf
or
Ni
ger
i
ans.Ital
so
:
(
i)e
ncour
age
stheco
nse
rvat
iono
fener
gy-t
hecos
tofu
singen
ergywi
ll
inc
rea
se
d
uet
othere
movaloff
uel
sub
sid
ieswhi
chwi
llen
cou
rag
epeo
pletoco
nser
veene
rgy
.
 (
ii
)re
duc
esc
orr
upt
io
n
(
ii
i)i
mpr
ovest
heef
fi
ci
enc
yoft
hee
con
omyb
yle
sse
nin
gma
rke
tdi
st
ort
ati
ons
a
ndp
romot
escompe
ti
ti
on.
(
iv)at
tr
actsin
vest
ment
-el
imi
n a
tingfu
elsub
si
diescancr
eateamo r
efavou
rab
le
i
nves
tmentcl
imatebydemo
nst
rat
ingthegover
nment
'scommitmenttoec
onomic
r
ef
orms.Thi
sc anat
tra
ctbo
thl
ocalandfor
ei
gninve
stors
,sti
mula
tingec
onomic
g
rowth,
jobcr
e a
tio
na n
dtec
hnol
ogi
caladva
ncement
s.
(v)re
dir
ect
sres
our
cest
owar
dsso
cia
lwel
fa
repr
ogra
msthatt
arg
ett
hemost
v
uln
era
bleseg
mentsofs
oci
et
y,e
nsur
i
ngalor
eequi
ta
bledi
st
ri
but
io
no fr
eso
urc
es.
(
vi
)en
han
cest
ran
spa
ren
cya
nda
cco
unt
abi
l
it
yint
hee
ner
gys
ect
or.
I
tisal
soi
mport
antt
oknowthatwhi
let
her
ear
epoten
ti
alben
efi
tst
ore
movin
g
f
uel
subs
idi
es
,tgei
mple
menta
ti
onsho
u l
dbeac
compa
nie
dbya p
pro
pra
it
emeas
ure
sto
a
ddr
esst
hepote
nti
ala
dver
seef
fec
tsonvul
ner
abl
epop
ula
ti
ons.
C
ONSO
FFUELSUB
SIDYREMO
VAL
Ontheot
herhan
d,r
emovi
ngfu
elsub
si
dyc ou
ldl
ea dtoin
cre
aseinthepr
ice
sof
p
etr
ol
eump r
oduct
swhic
hcanal
sol
eadtoin
fl
a t
io
nan dre
d u
cethepurc
hasi
ngpower
f
orcu
s t
omers
.Thisc
anhaveane
gati
veef
fectacr
osstheecono
my ,
impact
ingthe
c
ostofgood
sandser
vic
es.
Removaloffue
lsubs
id
ycouldals
oleadtosoc
ial
unre
standpr
ote
stsandal
so
l
eavepeo
pletothi
nkth
eg o
vern
me ntar
eno tc
oncer
nedwit
hthei
rne
eds.Ther
eis
h
ighri
skthatsu
bsi
dyremoval
couldle
adtoris
einfue
lsmuggl
i
ngandotheri
ll
ega
l
a
cti
vit
ies
.
Itcanal
soi
n c
reas
ebothe
ner
gyc os
tan
dthec
ostofl
iv
ing
.Thisi
soneoft
he
maj
orconcer
nsofsubs
id
yremova
l.Itca
nle
adtoh
igh
ertr
ans
por
tat
ionco
sts
,
af
fec
tin
gt h
epri
cesofgoo
dsandser
vic
esac
ros
sva
ri
oussec
tor
s,t
here
byimp
act
ing
t
hecostofli
vi
ngforci
ti
zen
s.
Als
o ,t
heagri
cul
tu
resect
orhea
vil
yrel
i
esonaffo
rdabl
efuelf
ortra
nspo
rta
ti
on,
i
r
ri
g a
ti
o nandmachi
ner
y.High
erfue
lpr
ice
scanin
crea
seproduc
ti
o ncos
ts,
impac
tin
g
f
armer
s' p
rof
it
abi
lt
yando v
eral
lag
ri
cul
tur
alpr
odu
cti
vity
.Th i
s,i
nturn,
canaff
ectfo
od
s
ecur
ityandthecou
ntr
y'sabi
l
it
ytome e
tdomest
icdemand.Alotofbus
ine
sse
sma y
f
acedif
fic
ult
ie
sadjus
ti
ngtohigh
erfue
lpr
ice
s,r
educi
nginv
e s
tments
,le
adi
ngto
p
ote
nti
al
ll
ayo
ffsa
ndma
rke
tun
cer
tai
ni
ti
es
.
Thed e
cisi
ontore
movef
uelsu
b s
id
iesi
nNigeri
amusttak
eint
oa cc
ountthe
p
oten
ti
alnegati
vecon
seq
uen
cesth
atma yari
se.Whil
ethe
rear
eargumentsinf
avour
o
fsubsi
dyremoval
suc
hasec
onomiceff
ici
enc
ya ndfi
sc
alsus
tai
nab
il
it
y,itises
sen
ti
al
t
oimpl
ementsuppor
ti
vemea
sur
estomitig
atethecha
ll
eng
esfac
edbyv ul
nerab
le
g
roup
sandke ysec
tor
s.
I
nc o
ncl
usi
on,
theremovalofsub
sidyhasbot
hposi
ti
veandn
egat
ivee
ffe
cts
.The
g
over
n me
ntsh
oul
dc a
ref
ull
yc o
nsid
ertheimpac
to fs
ubs
id
yremova
landta
keste
psto
p
reve
ntthen
egat
iveef
fects
.Stepsl
ikeincr
eas
ingci
vi
lse
rva
nt'
ssal
ar
yisaposi
ti
ve
s
toptopr
eve
nti
ngnegat
iveimpact
s.
Theri
chandad
van
cedco
unt
ri
ess
ti
ll
subs
id
is
efue
lfo
rth
eirp
eop
lebutt
hesad
r
eal
i
tyisth
atcor
rup
ti
onande
cono
micr
eal
i
ti
eswon'
tal
l
owNig
eri
atocon
ti
nueth
e
s
ubs
idyre
gime.
I
tisn
otsus
tain
abl
etocont
in
uetobor
rowtopaysub
si
die
s.Al
soin
cre
asi
ng
min
imumwagesi
sap os
it
iv
estepto
wa r
dsmi
ti
gati
ngth
eimpacto
fremovi
ngt
hefu
el
su
bsi
dy.Gi
ver
nmentata
lll
eve
lssho
uldi
ncr
eas
ewo r
ker
s's
ala
ry.
Ho we
ver
,mor
eme a
sur
esneedtobei
mpl
ement
edt
oe n
sur
ethesoci
etyi
sre
ady
f
orth
ispos
it
iv
eeff
ect
s.Thefo
cusismean
ttobeonf
in
din
gas ol
ut
ionth
atmeet
sthe
n
eedforec
ono
micgr
owthandde
velop
mentan
dals
otoens
ure
theacc
essoffu
elt
oal
l
c
it
iz
ens.
Alt
hou
ghweareal
lf
aci
ngdi
ff
ic
ult
ie
stoa
dap
ttot
hi
sne
wsy
ste
m,b
uti
'
m
s
uret
herewil
lbeah
appyen
din
gtoal
lth
is
.