INTRODUCTION

The Federal University Otuoke, Bayelsa State in fulfillment of one of its core responsibilities to the society resolved to interrogate the current Federal Government policy of fuel subsidy removal in its 1st Faculty of Management Sciences National Conference which held for two days on May 6th and 7th, 2024 at the Post Graduate Conference Hall of the University. The theme of the conference was “Managing the Complexities of Subsidy Removal in the Petroleum Industry in Nigeria”. The Conference was declared Open by the Chief Host and Vice Chancellor, Federal University Otuoke, Professor Teddy Charles Adias. Present at the occasion were Dr James E. Neminebor, President and Chairman of Council, Association of National Accountants of Nigeria (ANAN) who served as Chairman of the Conference as well as Dr  Kayode Fusua, Registrar and Chief Executive Officer of ANAN. The Keynote Address was presented by Professor Okechukwu Onuchukwu, the Vice Chancellor Ignatius Ajuru University of Education, Port Harcourt. Several papers that examined the theme from different perspectives were presented and discussed.

 

OBSERVATIONS

Conference observed the following:

    1. That subsidy imply that someone is paying part of the cost of production or supporting the consumption of goods and services. That Fuel subsidy consumption of petroleum product is increased, and the reverse is the case when it is removed.
    2. That Subsidy has always been part of the economic policy of many nations including the advanced economy. That subsidy in fuel price exists if the price is below the international price.
    3. That there was endemic corruption in the fuel subsidy regime in Nigeria. That the removal of fuel subsidy by the Federal Government was mainly due to the high level of corruption.
    4. That the present Federal Government policy of fuel subsidy removal is laudable as it is intended to curb corruption in the petroleum products supply chain leading to reduction of pressure on government finance, reduce budget deficit and increase in government distributable revenue.
    5. That fuel subsidy removal has strong consequences on all stakeholders. It is apt to stimulate investment in alternative sources of energy. It will also worsen income inequality and inflation as energy is a major input factor in the cost of production.

 

RECOMMENDATIONS

In the light of the above observations Conference recommends the following,

    1. That government in its wisdom should embrace well thought out strategies that mitigate the impact of fuel subsidy removal on the vulnerable group. That government should deploy welfare buses to facilitate the transportation of the citizens and make provision for welfare tickets to poor.
    2. That government should create avenues that will enable Small and Medium-Scale Enterprises to build capacities and increase productivity that could help to revamp the ailing economy.
    3. That value addition through production is the key to stabilize the foreign exchange market and mitigate the negative impact instability of fuel prices.
    4. Government should ensure that the existing refineries are operational while encouraging the establishment of modular refineries in all geopolitical regions in Nigeria. The potentials of artisanal refining should equally be harnessed.
    5. Proper mechanisms should be put in place to account for the gains that accrues from fuel subsidy removal and that such gains should be directed to stimulating local production of goods and services.