Nigeria: This So-Called Subsidy

analysis

Ajaokuta — Successive Nigerian governments since the mid-1970s have been advocating and implementing 'appropriate pricing' of petroleum products, which is a euphemism for price hike and oil subsidy removal. I intend to undertake an empirical and verifiable analysis of the much misunderstood concept of subsidy as applicable to the downstream sector of the Nigerian oil industry.

Domestic demand for petroleum products was entirely met through importation by the private sector before 1965. The then Shell-BP built Nigeria's first refinery in Port Harcourt in 1965. However, the coming of the oil boom in the mid-1970s compelled government to become directly involved in the downstream sector. Government built refineries at Warri, Kaduna and a second one at Port Harcourt after taking over the first one built by Shell-BP.

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