This report is courtesy of PremiumTimes, a Nigerian news organization that tracked the impact of the subsidy removal nationwide, most regions of Nigeria saw a major increase in food prices and transportation costs for intrastate and interstate travel.
Monday last week saw the re-emergence of gasoline lines in Nigerian cities as drivers scurried to buy petroleum products hours after the country’s newly elected President Bola Tinubu announced that the government will abolish the fuel subsidy scheme. In his inauguration speech on Monday the 29th of May at Eagle Square in Abuja, Mr. Tinubu vowed that the fuel subsidy scheme will end because it was unsustainable.
“We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favored the rich more than the poor. The subsidy can no longer justify its ever-increasing costs in the wake of drying resources,” the president said.
“We shall, instead, re-channel the funds into better investment in public infrastructure, education, health care, and jobs that will materially improve the lives of millions,” he added.
The Nigerian National Petroleum Company Limited (NNPCL) authorized an increase in the national pump price of petroleum on Wednesday in response to the recent event, bringing the price from the previous average of N189 to an average of N500. The permission became effective on May 31st, according to a circular from the NNPCL.
In many areas of the country, panic purchasing and bottlenecks at gas stations followed the announcement, despite regulatory organizations calling for calm amidst the mayhem. Prices for commodities, necessary services, and food items surged as a result of the resulting effects.
According to Reuters, Nigeria spent N4.39 trillion ($9.7 billion) on gasoline subsidies last year. In Nigeria, expenditure on subsidies frequently exceeds that allocated for healthcare, education, and other crucial sectors of human capital development.
The strategy and its impact on Nigeria's budgetary sustainability have been cautioned against by experts and international development organizations. This year, the outgoing administration said it would defer decision-making to the next administration and would only offer financial funding for the fuel subsidy until June 30.
However, opponents of the removal claim that it would raise the cost of products and services and exacerbate the poverty of millions of people. On Wednesday, the Nigeria Labour Congress (NLC) and other labor organizations pledged to demonstrate against the government's decision.