Nigeria has seen a roller coaster of change as their newly elected President Bola Ahmed Tinubu has removed a decades-old fuel subsidy policy in the nation.
The announcement, made just one day after his inauguration, sparked panic-buying as private oil companies undertook a swift increase in fuel costs. Private oil companies operating in the country stopped selling gasoline, and queues formed in front of state-owned gas stations.
Fuel prices in major cities such as the capital Abuja and Lagos rose to 600 naira ($1.30) per litre from the previously price of 185 Nigerian naira ($0.40).The decision to scrap the fuel subsidy has raised a lot of questions regarding the cost implications it will have on citizens and businesses. But Tinubu argued that the increasing costs of the subsidy are “no longer justifiable due to depleting resources,” and stated that the policy favours only the rich– not the poor.
The removal of Nigeria’s fuel subsidy is causing concern in the public about how their daily life will be impacted. While the goal of substituting the subsidy by establishing social safety nets has been announced, it is yet to be seen how they will deal with the higher prices of fuel. As a result, citizens are looking for possible alternative methods of commuting.
The Nigerian National Petroleum Corporation (NNPC) has reassured Nigerian citizens that there is no need to panic despite the abrupt ending of the fuel subsidies. In a press conference on Monday, the NNPC’s CEO Mele Kyari clarified that there was no shortage of fuel in the country and that the current stock was more than enough to meet the needs of the people.
Kyari pointed out that due to the government’s financial inability to cover the hefty and mounting subsidy expenses owed to oil companies, the private sector has been financing the subsidies since 2000. Earlier in the press conference, the NNPC executive revealed that Nigeria, despite being one of the two largest exporters of oil in Africa, is still hugely dependent on the import of fuel due to limited refining facilities nationwide.
The fuel subsidy was introduced to the public in October 2000, with the attempt to reduce the cost of fuel through direct payment from government sources. It appears that the endeavour has not yielded much result considering the fact that trillions of naira of the nation’s currency is still being spent to sustain the subsidies scheme annually.
Nonetheless, Kyari’s statement on Monday quelled the fears generated by the recent tumult by confirming that the current gasoline supply is enough for the Nigerian people and that the government is working on different alternatives to substitute the recently abolished fuel subsidies. Budgets are currently underway, he said, and the results will be announced soon.