Nigeria is the major oil and gas producer in Africa, and has spent approximately $8 billion a year on fuel subsidies . The country has been importing gasoline even though they produce oil for exportation because of poor local refining capacity . However, earlier this year President Goodluck Jonathan announced immediate removal of the subsidy, and the result was an almost doubled fuel price for citizens, which led to thousands taking to the streets in chaotic protests . It is interesting to note that rival Muslims and Christians in the country banded together during the protest period  to express their immense dissatisfaction against a decision that equally affected them. In response to the unrest, the President restored part of the subsidy but prices were still about 50% higher than before . Authorities in Bolivia and Venezuela have likewise attempted subsidy cuts in the past, with the result being similar: angry protests, violent clashes and even fatalities . In all of these cases, the government quickly reversed its decision in order to pacify the people.
Fuel subsidies remain a contentious issue. Some people welcome the idea for making fuel affordable to the poorer constituents of a population, while others believe it is a short-term remedy with no real benefits to the poor and that the wealthy minority tends to gain. Despite the fact that Nigeria is a major oil and gas producer, the wealth from their abundant resources has not historically been passed on to the citizens. It is estimated that 80% of the oil wealth goes to 1% of the population . Subsidized fuel was one of the few benefits of the oil wealth enjoyed by the Nigerian people. On the other hand, it is true that the subsidies they enjoy have been taken advantage of by smugglers who sell the low cost gasoline at higher prices to nearby countries . Removal of subsidies could reduce wasteful consumption and allow money to be used elsewhere in the country’s development. However, it can also be argued that the administration has a reputation of corruption and the money that would have been used for subsidies may not necessarily go towards developing other areas that benefit the country.
Perhaps the administration’s approach should have been different, and instead of abruptly slashing the subsidy, they could have gradually reduced it with support. Several countries have implemented programs to assist people with the transition by lending support for school fees and health care in light of the price increases . In the case of Nigeria, even though the protests have abated since earlier this year, it was reported last month that the population still feels the strain in their pockets as they have not yet received assistance . The fact that other countries have experienced success with fuel subsidy removal suggests that it is probably not a negative move but that policymakers have a significant role to play in ensuring a smooth transition. There are long-term benefits that could be attained but it should be recognized that fuel price increases affect prices of other commodities. Although it is likely that protests would still occur, a gradual subsidy removal with some form of transitional support might have been more beneficial to the Nigerian population than the abrupt cut that was made. This situation is a learning experience for other nations that have similar intentions for reducing or eliminating their fuel subsidies.
 Nossiter, A. (January 16, 2012). “Under Pressure, Nigerian Leader Relents on Gas Price.” The New York Times
 Omisore, B. (March 7, 2012). “Nigeria’s Rocky Effort to Wean Itself from Subsidized Fuel.” National Geographic news
 BBC News Africa (January 13, 2012). “Nigeria fuel subsidy strike: Protests suspended.”