1.0 fuel, government sponsored technology or research

1.0 INTRODUCTIONThe petroleum sector has played an immense, and its role has being strategic in the Nigerian economy growth trajectory. Moreover; this sector is fundamental in achieving the country’s vision of becoming one of the leading economy in the world by the year 2020 (Musa, 2014). For decades now, Nigeria’s economic policies, growth and other related activities had largely being influenced by the oil industry in a profound way; as the oil sector is a life-blood for the Nigerian economy (Adelabu, 2012). This spells so much about the significance of this sector in shaping the “now and then” economic status of the country. And in spite of the government’s  economy diversification agenda; petroleum sector the still accounts for about 90 per cent of the country’s foreign exchange, accounts for 80 per cent of government revenue, and contributes well over 20 per cent to the country’s Gross Domestic Product (GDP) (US EIA, 2012; World Bank 2012;IMF,2012).Subsidy has different interpretations: It could be an assistance rendered by government or measure that to keep consumer price of goods and services below market levels. Subsidy invariably is the benefit given by government to individuals or business in various forms which could include cash, tax reduction or an induced decline in cost of goods and services. Others types of subsidy that affect prices indirectly could be in form of regulations that skew the market in-favour of fuel, government sponsored technology or research and development (Adebiyi, 2011). The purpose of subsidy is to help individuals and business purchase/obtain essential goods or services that they may not be able to afford under normal economy circumstances. In addition; Fuel subsidy means that a fraction of the price that consumers are supposed to pay to enjoy the use of petroleum products is paid by government so as to ease the price burden. Fuel subsidy is a form of price manipulation in which the government stabilized the pump price of fuel by saddling on the responsibility to pays for discrepancy between the actual price and the regulated or official price per litre (Iyobhebe, 2011, Nwafor, Ogujiuba and Asogwa 2006). On 1st January, 2012 the Federal Government of Nigeria under the leadership of President Goodluck Jonathan through the Petroleum Products Pricing and Regulatory Agency (PPPRA) announced to obviate the subsidy on the Premium Motor Spirit (PMS). This consequently led to an incline in the pump prices of PMS from N65 per litre to between N138 official price and N140 commercial price (Adeleke & Gafar, 2012). This increase in fuel price in turn led to an exorbitant increase (more than double) in transport fares, price of foodstuffs and other basic essentials. All these ignited several acrimony in form of debates, strike actions and protests nation-wide.1.1 STATEMENT OF PROBLEMFuel subsidy removal has been a bone of contention, which in several times has created a lot of tension and raised skepticism in various quarters. Between 1978 and 2012, various government regimes have changed the fuel prices for a total number of 23 times. But the idea of fuel subsidy removal in Nigeria emerged during the military regimes; precisely under the administration of General Ibrahim Badamosi Babangida (Ekpe, 2003). The Nigerian state under Babangida in 1986 initiated the idea of withdrawing Petroleum subsidy by announcing the withdrawal of the pump price of the product, which rose to an alarming rate. For instance, the price of gasoline and diesel which stood at 20 kobo and 11 kobo per litre in 1985, were raised to 39.5 kobo and 29.5 kobo in 1986. This represented an increase of 97.5 percent and 168.2 percent, respectively. At the fall of the military regimes, the Nigerian state still has implicit confidence in further removal of fuel subsidy which was considered to be a headway to restoring economic viability as illustrated by the Obasanjo and Jonathan regimes recent decisions to abolish government subsidy on domestic fuel sales and to hike the price cap on petrol by 54 percent. Although it is seen by the government under the leadership of President Goodluck Jonathan as an avenue to prevent a huge sum of 3.4 billion naira spent in subsidizing fuel that went into fraudulent hands (Gyoh, 2012) and a headway to curb fuel smuggling across Nigeria boarder thereby eliminating scarcity in Nigeria, the Nigeria labor unions and the civil society groups to speak against this policy as the effect may be inimical.Gasoline, premium motor spirit (PMS) or fuel as it is normally called in Nigeria is the second most demanded product after food in Nigeria. Whenever the price of fuel increases, the price of other and every product increase. This is as a result of the fact that the transport cost for providing any essential services goes up and this always has a spill-over effect on the economy; the ripples are felt in the nook and cranny of the country. No part of the economy functions in singular, every part of the economy functions and depends on the other for services. The movement of agricultural product from one place to another depends on the transport sub-sector, so the removal of subsidy means increase in transport cost as well as increase in price of agricultural product. For instance, an increase in the pump prices of PMS from N65 per litre to between N138 official price and N140 commercial price (Adeleke & Gafar, 2012), was responsible for the astronomical increase in