MANIPULATING THE INVISIBLE HAND: HIKE IN FUEL AND ELECTRICITY PRICE IN NIGERIA

It is no longer news that the Federal Government of Nigeria has increased the price of Premium Motor Spirit otherwise known as fuel as well as that of electricity. This has triggered reactions from the citizens and pockets of protests in some states of the country. Ordinarily, it is expected that the Invisible Hand, that is forces of demand and supply should regulate the prices of products in the open market. But, in Nigeria, government has constantly interfered and interrupted the spirit of this self-regulated system and it has always led to one problem or the other.

If the success recorded in the telecommunication sector as well as its relative efficiency is anything go by, it should serve as enough cue to the government that complete liberalization and deregulation of the sector as against monopolization should be replicated in the oil and power sectors in order to overcome the year in year out fracas witnessed in each instance of these hikes.

AFEEDI recommendation is that, as the government have recently laid claim to the removal of subsidy, she should move a step further by deregulating the downstream oil industry. On the power sector government should sell off her overwhelming interest in the power supply chain and open up the space for more investors to come in. This will eliminate the current inefficiencies plaguing the sector and in the price system will even-out demand and supply in tandem with the current economic reality of the masses.

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