MEANING OF SUBSIDY

This is any grant of financial aid from the government used to maintain the prices of a particular item at a certain level. To subsidise is to sell a product below the cost of production, fuel subsidy, therefore, means to sell petrol below -the cost of importation.

Fuel subsidy can be properly defined as government effort in paying for the difference between the pump price of fuel at the petrol station and the actual cost of importation of the product.

So by paying the difference, the government enables fuel to be sold at a lower price so as to help ease the burden of its people especially lower income group, Fuel subsidy is a grant of financial aid from the government used to maintain the low price of petroleum products,

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