IMPACT OF FUEL SUBSIDY REMOVAL ON THE OPERATION OF SMALL SCALE BUSINESS IN NIGERIA (A CASE STUDY OF SELECTED BUSINESSES IN OWERRI METROPOLIS)
This research which is a modest attempt to study the impact of removal of fuel subsidy has been systematical surveyed and analyze by the researcher. The researcher selected some firms as a study and reviewed some impacts that exist within removal of fuel subsidy, its effect in Nigeria citizens. Data were gathered with the use of questionnaire and oral interview and the researcher noted that fuel subsidy removal affected a host of individuals as well as Nigeria citizens. Although fuel subsidy removal should be discouraged because of its negative impact to Nigeria citizens as a whole.
1.1 BACKGROUND OF THE STUDY
In the past Nigerians solely depended on the exportation of agricultural product for their source of income. This continued until the discovery of the presence of the presence of oil in our country, especially in Port Harcourt. This made them (Nigerians) to divert from agriculture to the exportation of oil to other countries, which was actually fetching them much money even till this present time.
There are many subsidiary oil companies scattered all over the country but the biggest among them is in Port Harcourt and it is called the Nigeria National Petroleum Company (NNPC). It is from here that crude oil is extracted from the ground refined to get those components like fuel, kerosene and gas. There are depots scattered all over the country, like shell port Harcourt, NNPC oil, EIF oil company, Warri pipelines are directed towards these oil companies to facilitate distribution. It was observed that shortage of petroleum products in one part of the country cannot be resolved by pumping from the area with surplus petroleum products because the pipelines and depots were not interlinked.
When Nigeria got her independent, the main stay of Nigeria’s economy was agriculture. By the end of first decade of its existence as a sovereign nation, agriculture was replaced by oil as the most important revenue earner for the country. The fall on oil revenue and the subsequent reduction of the revenue from the oil sector can be regarded as a lesion in disguise for Nigerian government for one thing. It has shown that the government dependence on one source of revenue is not good for any country for another. It has shown that dependence on imported goods of all kinds cannot in any way help the country to develop.
Tanker drivers and other dealers will load from the depot and distribute to filling stations, then the consumer will buy from the filling stations. Fuel supply has been moving smoothly in the country before the announcement of the budget by the head of state in January last four year 1999. It was in February 1999 that the whole issue of fuel scarcity started. This has made it difficult for the government to accomplish that which it proposed to do the budgets.
One of the most inevitable problems that also faced and caused fuel subsidy is when there is any fault in the refinery because of this problem there is fuel subsidy. Oil companies kept Nigerian fuel as a reserve. This policy has definitely shunned down our economic development. This is typical of all international monopolist schatal revealed that since shell has had twenty years in which to pick and has the area where to drill for petrol and has chosen the best sites. In other to get monopoly control now and in future over oil industry.