Why Nigeria’s Fuel Subsidy Crippled Our Refineries

Nigeria’s refineries collapsed because strict price controls under the fuel subsidy prevented them from making a profit. Selling fuel below cost meant the government had to cover huge losses. But our oil revenue could not fund both modern refinery upgrades and a costly subsidy, even before accounting for corruption. Maintenance and upgrades were skipped to save money. Smuggling and graft drove subsidy bills and national debt higher. By the time reform efforts restarted in 2009, it was too late. Attempts to remove the subsidy in 2012 failed amid public distrust. Yet Nigerians still support costly subsidies in power and education, risking the same fiscal trap.

Use The App To Win ₦1m

Stories are shared by community members. This article does not represent the official view of NaijaWorld — the author is solely responsible for its content.