​The cost of petrol per gallon in California is not the same in Texas. In the United States, there is no such thing as a fixed subsidized national price for fuel. In Alaska you can buy fuel for above $3 while in Maryland, it is slightly above $2.
The logic is simple. The United States is a federation and as such, the federal government cannot decide in totality what the price of fuel should be in both California and Texas. These are autonomous states and therefore have a degree of control over how petrol is sold and regulated in their territory. A state that is opposed to global warming can impose a 3 cent tax on fuel to discourage residents from burning too much fuel in the state!

Let us return to Nigeria.

In Nigeria, while a basket of tomatoe could sell for NGN5,000 in Kano, the same tomatoes could be selling for NGN15,000 in Lagos. The reason why this is so is simple. The federal government is not in charge of the tomatoes business. So there is no injustice in buying a basket of tomatoes cheaper in it’s place of production (Kano) than in the place where it is more valuable (Lagos). In the tomatoe business, the end user in Lagos pays for the risk, transportation and even taxes for the tomatoes he consumes. This is how it should be anyway.

Let’s look at petrol in Nigeria.

In Nigeria, the price of petrol in Sokoto is the same as the price of Petrol in Port Harcourt. Why? Because the federal government has so much money and can therefore pay for this to be so.
Remember, in the tomatoes business, the end user in Lagos pays for the transportation, but in the petrol business, the federal government pays for the end user in Sokoto! I am not done.
The reason why the FG pays subsidy for fuel is not because it wants to necessarily make the product cheap, it is because it wants to make the price of the product uniform across Nigeria. Remember, in reality, Nigeria is a unitary state.
I do not need to remind Nigerians about how much we have spent in making petroleum products unified for the past decades. Let me stop here.

Source: Maha Osita


Leave a Reply