Nigeria Lifts Popular Fuel Subsidy

As part of its 2012 draft budget, the Nigerian government has removed the country's longstanding fuel subsidy, setting off popular protests and leading oil unions to threaten strikes. There is a strong economic argument for the move, as the subsidy disincentivized reforming Nigeria's energy sector. It did, however, create a patronage network outside of Nigerian President Goodluck Jonathan's control. Jonathan's new plan for handling oil revenues and spending items will mean a patronage network of his own, which in turn increases the likelihood that state governments or others outside the current subsidy regime will do their utmost to get the unrest under control.