The pump price of gasoline in Nigeria increased by nearly three times after President Bola Tinubu promised to end fuel subsidies, which cost the government $10 billion last year.
In Lagos, Nigeria’s commercial hub, the Nigerian National Petroleum Cooperation (NNPC) has raised the cost of fuel from 184 naira to 488 naira per liter, according to a document viewed by Foxiz Nigeria and confirmed by the company. According to the statement, prices in Abuja, the nation’s capital, will increase to 537 naira from 194 naira.
Nigeria’s President, Bola Ahmed Tinubu, declared the end of the decades-long subsidy during his inauguration speech. After the announcement to adjust prices, many filling stations across the country stopped selling fuel. Queues formed at retailers while the price of intra-city and inter-city transport increased.
Also Read: Nigeria’s President, Bola Ahmed Tinubu removes Fuel Subsidy
On Tuesday, the abandonment of the policy led to a rally in Nigeria’s dollar bonds. If the subsidies remain in place, Africa’s biggest oil producer would have to invest six trillion Nigerian naira ($12.9 billion) this year if it is to be able to generate about two-thirds of its annual revenues from crude and natural gas production.
In one of Africa’s most populous countries, where about 40% of the population lives in extreme poverty, a surge in oil prices could make it difficult for the Central Bank to control inflation. Since May 22, 2022, the Monetary Policy Committee has increased its key interest rate by 700 basis points, reaching an all-time high of 18.5%. In April, price growth accelerated to a near-eighteen-year high of 22.2%.
NNPC, Nigeria’s fuel importer, sells gasoline at a loss, and CEO Mele Kyari says the government has not reimbursed the company for over $6 billion spent on maintaining low prices.
