Fuel subsidy removal: Tinubu’s incoming govt walks tightrope

The planned removal of fuel subsidy in Nigeria has again topped discussions ahead of the inauguration of a new government come May 29, 2023.

Successive governments have provided support on fuel prices for decades to keep fuel prices affordable for the general population.

However, these subsidies have been a significant drain on the country’s economy, with the government spending billions of dollars each year to keep prices low.

In 2012, former president Goodluck Jonathan’s bold attempt to do away with subsidies sparked widespread protests nationwide.

Many Nigerians argued that the policy would increase the cost of living and hardship for ordinary citizens. Labour unions, civil society organisations, and opposition political parties, including the then opposition- All Progressives Congress, APC, led the protests.

However, President Muhammadu Buhari’s led government had announced that the subsidy policy would end by June when the budget for the initiative would expire. The timeline coincides with the end of Buhari’s second term as the president, the maximum allowed by the constitution.

According to Zainab Ahmed, who oversees the country’s Ministry of Finance, Budget and National Planning, “the subsidy cost per litre of petrol ranged between N350 to N400, maintaining that Nigeria spends about N250 billion monthly on subsidy.”

Speaking during a courtesy visit to the Voice of Nigeria in Abuja, she attributed the delay in removing the subsidy, as provided for in the Petroleum Industry Act (PIA) 2021, to the 2023 general election and the forthcoming national population census.

“Right now, we have approval within the Appropriation Act to exit the subsidy by June 2023. Or at least, I can say, the Appropriation Act made a provision that only allows subsidies up to June 2023,” she said.

Amid this development, the country was toiling to find buyers for its crude oil as strikes in the French refining sector and seasonal maintenance at European plants cut into the OPEC producer’s sales