Felix Onyeka
Amid constant criticism on its poor subsidy implementation approach,the Nigerian government has announced plans to offer Nigerians cheaper petrol for 30 days through a discount at filling stations operated by the Nigerian National Petroleum Company Limited (NNPCL).
The move,the government said could provide temporary relief to households and transport operators still grappling with high energy and living costs.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed the plan in Abuja on Thursday, while assuring that the discount would particularly prioritise public transport operators. Blueprint reports
“There’ll be a discount on NNPC petrol for the next 30 days, with priority for public transporters,” Oyedele said.
He also disclosed that the Federal Government would negotiate a lower landing cost for petrol, with the negotiated cost subject to monthly review.
The announcement comes more than three years after President Bola Ahmed Tinubu announced the removal of the petrol subsidy in May 2023, a policy that affected Nigerians purchasing power and spiked up energy and food inflation.
Economic watchers,however, asks whether the proposed 30-day discount represents a carefully targeted intervention to cushion consumers from high petrol prices or the beginning of a gradual return to the kind of government-targeted fuel pricing regime as proposed by majorities of opposition parties.
Notably, the Nigerian subsidy removal also generated lots of questions with government’s prudence in financial management when majority of Nigerians had to go through economic hardship since 2023.
In 2023, while Nigerians were being urged to endure hardship, the administration’s supplementary budget included billions of naira for presidential vehicles, the presidential air fleet and renovation of presidential residences.
It was later learned that ₦12.7 billion was earmarked for the presidential air fleet and ₦4 billion for the president’s residential quarters. The controversial ₦5.0 billion ‘presidential yacht’ allocation was subsequently removed by the house of representatives and redirected to student loans.
AdvocateTimes reports that the World Bank estimated that Nigeria spent more than N8.6 trillion between 2019 and 2022 on gasoline subsidies and argued that the policy did not adequately benefit the poor, while also creating opportunities for smuggling and other forms of arbitrage.
The International Monetary Fund (IMF) similarly maintained that petrol subsidies disproportionately benefited wealthier consumers because people who consumed more fuel, particularly vehicle owners and businesses, received a larger absolute benefit than poorer Nigerians.
It would be noted that the the time President Tinubu assumed office on May 29, 2023, the subsidy had become one of the government’s most contentious fiscal issues in addition to the floating of the Naira.
In his inaugural address, Tinubu declared that “fuel subsidy is gone”, immediately setting the country on a new path in which petrol prices would increasingly reflect market conditions rather than being fixed through government intervention.
