Fuel prices have nearly tripled in Nigeria after the country’s new President Bola Tinubu said his administration would no longer subsidize gasoline for citizens of Africa’s largest oil producer.
In a seemingly off-the-cuff remark during his inaugural speech Monday, Tinubu declared, “the fuel subsidy is gone,” adding that it was unsustainable. The rising costs could not be justified as resources dwindle, he said.
“We shall instead re-channel the funds into better investment in public infrastructure, education, healthcare and jobs that will materially improve the lives of millions,” Tinubu added.
[COLOR=rgb(184, 49, 47)]At NNPC retail stations in the capital Abuja, the price of petrol was swiftly adjusted Wednesday from 195 Naira (42 cents) per liter to 537 Naira ($1.16), almost three times the former price. ( = Ksh 161 / Liter)
It’s a drastic move for a country in which cheap gasoline has been a feature of daily life for decades and a lifeline to millions of Nigerians facing economic hardships. The last time the government tried to remove fuel subsidies in 2012, it sparked nationwide protests.
Long lines immediately started forming at gas stations after Tinubu’s speech, as Nigerians rushed to stock up on fuel before the impending jump in prices.
[SIZE=5]A ‘reckless’ move[/SIZE]
Analyst Sam Amadi said the government’s new policy would inflict even more hardship on Nigerians, who are already grappling with soaring inflation and high living costs.
“Transportation costs will hike by over 200%… more people will slump into poverty and restiveness and violent crime may increase, damaging prospects for stronger economic recovery,” Amadi, director of The Abuja School of Social and Political Thought, a think tank, told CNN.
Fuel subsidies were not sustainable, but ending them “abruptly” without provision for economic and social consequences was “reckless,” he added.
NNPC said subsidizing petrol “has long been a burden” on its resources, and its removal “will free up funds to enable optimal operations within the company.”
Fuel subsidies cost the company over 400 billion naira (around $867 million) monthly, it said.