Audience Perception Of Federal Government Removal Of Fuel Subsidy
(A Study of Enugu metropolis.)
The removal of fuel subsidy by the federal government has sparked varied perceptions among the populace, reflecting a spectrum of viewpoints ranging from skepticism to cautious optimism. While some segments of society view the move as a necessary step towards fiscal responsibility and economic reform, others express concerns about its potential impact on the cost of living, particularly for low-income households. Additionally, there is a subset of the population that perceives the removal of fuel subsidy as emblematic of broader governmental priorities, highlighting issues of transparency, accountability, and equitable distribution of resources. These divergent perspectives underscore the complex nature of public opinion surrounding economic policies, with discussions often revolving around themes of social welfare, government efficiency, and economic sustainability. As the discourse continues, it remains imperative for policymakers to navigate these perceptions effectively, engaging in transparent communication and proactive measures to address the concerns of various stakeholders while steering the country towards a more resilient and equitable economic future.
The aim of this study was to investigate Audience perception of federal government removal of fuel subsidy in Enugu metropolis. Three main research questions were formulated for the purpose of this study and other sub questions aimed at prying into audience perception, causes and effects of fuel subsidy removal in Nigeria. Survey research method was used because of its convenience, reliability and cheapness. The study population was Enugu Metropolis. A total of 200 respondents were selected, using the purposive random sampling. The number of retrieved questionnaire was 195, representing 97.5% response rate. Statistical analyses of data collected were performed using, frequency distribution, percentages, tables while Chi-square formula was used to test the formulated hypothesis. Results revealed that audience perceived the removal of oil subsidy as an act of selfishness, wickedness and the federal government means of promoting their selfish interest, thereby making the masses to suffer. Corruption in the oil sector and gross mismanagement and also due to few corrupt individuals that are united to promote their private interest among other factors have been found to be the reasons and causes for the removal of fuel subsidy. These in turn have led to increase in prices of fuel pump oil products; increase in prices of food commodities, transportation and increase in operating costs of micro and small enterprises. The researcher recommends that there was a significant relationship between fuel subsidy removal and cost standard of living of the general populace. She suggested that the federal government should look into other sectors of the economy such as agriculture, tourism etc. in other to boost the economy.
Title Page
Declaration
Certification
Dedication
Acknowledgements
Table of Contents
List of Tables
Abstract
CHAPTER ONE:
1.0 INTRODUCTION
1.1 Background of the Study
1.2 Statement of the Problem
1.3 Objectives of the Study
1.4 Research Questions
1.5 Scope of the Study
1.6 Significance of the Study
1.7 Operational Definition of Terms
CHAPTER TWO:
2.0 LITERATURE REVIEW
2.1 Introduction
2.2 Review of concepts
2.2.1 Concept of Perception
2.2.2 Concept of Fuel Subsidy Removal
2.2.3 Concept of Deregulation
2.3 The evolution of fuel subsidy in Nigeria.
2.4 The History of fuel subsidy removal in Nigeria
2.5 Reasons/Causes of fuel subsidy removal
2.6 The effects/impacts of subsidy removal on Nigerian economy
2.7 Theoretical framework
2.8 Summary of literature Review
CHAPTER THREE:
3.0 RESEARCH METHODOLOGY
3.1 Introduction
3.2 Research Design
3.3 Population of the Study
3.4 Sample Size and Sampling Technique
3.5 Description of the Research Instrument
3.6 Validity of Data Gathering Instrument
3.7 Method of Data Collection
3.8 Method of Data Analysis
CHAPTER FOUR:
4.0 DATA PRESENTATION AND ANALYSIS
4.1 Introduction
4.2 Data Presentation and Analysis
4.3 Test of Hypothesis
4.4 Discussion of Findings
CHAPTER FIVE:
5.0 SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.1 Introduction
5.2 Summary
5.3 Conclusion
5.4 Recommendations
References
Appendix A
Appendix B
INTRODUCTION
1.1 Background of the Study
For some number of years, Nigeria enjoyed subsidy on petroleum products. This came to an end on January 1st, 2012, after a declaration from President Goodluck Jonathan that afterwards, the subsidy was to be removed (Zaccheus, 2011). In Nigeria, the issue of appropriate pricing of petroleum product has always been a controversial policy issue. Successive governments have dealt with this problem to no avail. Suffix to say that in Nigeria, subsidy removal implemented by governments had always yielded negative effects on the citizens. According to Centre for Public Policy Alternatives (2012), a subsidy by definition is any measure that keeps the prices consumers pay for a good or product below market levels for consumers or for producers above market. The essence of having subsidy in place for products and services is that it has direct positive impact on poverty reduction in the lives of the poor masses who could not afford high prices (Nwaoga and Casimir, 2013).
Subsidies were introduced in the Nigerian energy sector in the mid 1980‟s. Something of a creeping phenomenon, the value of the subsidies has gone from 1 billion in the 1980s to an expected 6 billion Dollars in 2011. In this period the specific products targeted for subsidy have changed. Diesel oil has had its associated subsidy redacted while petrol, gasoline; kerosene continues to enjoy a 54.4 % subsidy over the international spot market price at the Nigerian pump. Economists believed that social welfare is maximized when the price of each good and service is freely determined by the interaction of buyers and sellers in open competitive markets. In practice and especially in developing countries however, policy is often driven more by political consideration than rational economic theory. The risk of social unrest, street riots, and threats of civil war very easily make introduction of market distorting policies justified. Nigeria as a case in point is under increased pressures to grow its economy. Yet countervailing forces of corruption, mismanagement of public resources and poor governance conspire to frustrate efforts to sustain growth in the face of rising population numbers and demands for a democratic dividend by the citizenry (Centre for Public Policy Alternatives, 2012).
According to Centre for Public Policy Alternatives, the justifications for introduction or removal of subsidies vary markedly. In developed economies Environmental issues, international trade and maintaining competitiveness are the main drivers of policy. Whereas welfare, poverty alleviation and election cycle politics largely underpin the reasons for which subsidies are introduced in developing countries. A new factor in the current mix of policy drivers is the renewed emphasis on governance reform championed by the Bretton woods institutions-The World Bank, IMF and the donor community. Lending urgency to this scenario is the global economic downturn and consequent rationalization by lenders, aid granting countries. As domestic demand for funds increase in these countries amounts available for aid, FDI and subsidies diminish. The consequence is a demand for greater efficacy in the economies of the aid receiving countries of which Nigeria is one.
Furthermore, the issue of fuel subsidy removal has torn this nation into two factions, the government and the economic experts on one hand and the masses on the other hand. The last fuel subsidy removal on 1st January, 2012 sparked an uprising that almost led to a revolution; this attracted a lot of public debate, opinions and reactions leading to NLC strike and demonstrations in various states. Therefore, the major focus of this study is to investigate audience perception of federal government removal of fuel subsidy in Nigeria on January 2012.
1.2 Statement of the Research Problem.
Fuel is central to the economic pursuits of Nigerians, whose sustenance daily bread is tied to this bye product of Nigeria‟s rich crude oil deposits. The Petroleum Product Pricing Regulatory Agency (PPPRA) regulates the downstream Oil and Gas industry on behalf of the Federal Government and by the removal of subsidy on Premium Motor Spirit (Petrol), the downstream sub-sector of the Petroleum industry is deregulated for Petrol. Deregulation leaves market forces as the sole determinant of product prices. While over the years, many Nigerians have opposed the implementation of the policy in the Oil and Gas Industry, international finance and donor agencies like the World Bank and IMF have been very harsh in their criticisms of the successive governments that have sustained the policy for a single inherent flaw they condemned as harmful to the growth of the Nigerian economy. However it should be noted that there were obvious flaws in the policy at inception and up to January 1, 2012 when it was removed there were more private retailers of petroleum products than the state owned NNPC stations. The regulatory framework (PPPRA) used to enforce the subsidy was weak, under resourced and suffered from the Nigerian disease. The secrecy and lack of transparency by the administrator of the subsidy (the NNPC) did not help matters either. Nigeria still could not make her refineries efficient. This means that Nigeria could not produce enough refined products for local consumption. Finally, due to the weak regulation by the PPPRA, some economic saboteurs/cabal were able to misappropriate the fuel subsidy money and channel it to their own personal pockets instead of using it for what it was intended for. These and more reasons triggered the federal government of Nigeria to remove the subsidy on fuel. By this removal of oil subsidy, the question this study seeks to answer is: What is the perception of the audience with regards to the removal of oil subsidy in January 2012?
1.3 Objectives of the Study
The objectives of this study are:
1. To examine the audience perception of fuel subsidy removal
2. To examine the cause of the fuel subsidy removal
3. To ascertain the effects of fuel subsidy removal on the citizens of Nigeria.
1.4 Research Questions
The study will proffer answers to the following research questions:
1. What is your perception of the fuel subsidy removal?
2. What would you consider to be the cause of fuel subsidy removal?
3. What do you consider to be the effects of fuel subsidy removal on the citizens of Nigeria?
1.5 Research Hypothesis
H1: There is significant relationship between oil subsidy removal and cost/standard of living of the residents of Enugu metropolis.
1.6 Scope of the Study
This study investigates audience perceptions of the Federal Government removal of oil subsidy in January 1, 2012 amongst residents of Enugu metropolis. It also investigated how the audience perceived removal of oil subsidy. Decision was then made to conduct this study amongst residents of Enugu metropolis because of proximity to the base of the researcher.
1.7 Significance of the Study
The uniqueness of this study is that it will be used to determine the opinions, beliefs, attitudes and general behaviour of Nigerians on the Federal Government‟s removal of oil subsidy. Also, the study will add to the numerous literatures written on the issue of the removal of fuel subsidy by the government. It is also hoped that the findings of this study will help the government to be more alive to their duties, as it should be under a democratic government. Also, this study is significant politically because it will assist government in formulating formidable policies that will bring a more robust relationship with the people as well as engender the needed conducive environment for political and societal development. It will also help our future researchers to use the study as a source of reference for future research academic and other purposes.
1.8 Definition of Terms
The following terms that formed the topic of this study are hereby defined conceptually and operationally. The conceptual definitions are the dictionary meanings whereas the operational definitions are their working meanings they include:
Audience: This means those who are directly or indirectly affected by the removal of the fuel subsidy.
Perception: The general opinion held by Enugu urban residents about the removal of fuel subsidy by the federal government.
Fuel Subsidy removal: This means the withdrawer of the policy which made the price of fuel to be reduced for the affordability of average Nigerians.
Audience Perception Of Federal Government Removal Of Fuel Subsidy:
The perception of the removal of fuel subsidies by the federal government can vary widely depending on a variety of factors, including individual beliefs, economic conditions, and political ideologies. Here are some common perspectives that people may have:
- Positive Perception:
- Economic Reform: Some individuals may view the removal of fuel subsidies as a necessary step towards economic reform. They argue that subsidies can be a significant burden on government finances and that removing them could lead to more sustainable economic policies.
- Reducing Corruption: There is a perception that fuel subsidies can lead to corruption and inefficiency, as they create opportunities for fraud and mismanagement. Removing subsidies might be seen as a way to combat corruption and improve the allocation of resources.
- Fiscal Responsibility: Supporters of subsidy removal might appreciate the government’s commitment to fiscal responsibility, arguing that the money saved from subsidies can be invested in other critical sectors like healthcare, education, and infrastructure.
- Negative Perception:
- Higher Cost of Living: One of the most common negative perceptions is that the removal of fuel subsidies can lead to an immediate increase in the cost of living. This includes higher transportation costs, which affect the prices of goods and services, and can disproportionately impact low-income individuals and families.
- Social Impact: Critics may argue that the removal of fuel subsidies can have a negative social impact, as it can exacerbate income inequality and make it harder for the poor to access essential services and job opportunities.
- Protests and Unrest: In some cases, the removal of fuel subsidies has led to protests and social unrest, as people express their dissatisfaction with the government’s decision. These protests may be driven by the perception that the government is not acting in the best interest of its citizens.
- Political Implications: The perception of subsidy removal can also be influenced by political factors. Opposition parties and interest groups may use the issue to criticize the government, while supporters of the ruling party may defend the decision as necessary for the country’s long-term economic stability.
It’s important to note that these perceptions can change over time and can vary from one country to another, depending on the specific economic and political context. Additionally, public opinion may be influenced by how well the government communicates the reasons for subsidy removal and whether it implements measures to mitigate the negative effects on vulnerable populations.