Five Things You Need to Know about Fuel Subsidy Removal
Here are five essential points to know about the removal of fuel subsidies:
- President Bola Tinubu announced the elimination of fuel subsidies during his inaugural address on May 29. This led to an immediate increase in the price of petrol, with some fuel stations selling it for as high as N700 per litre.
- Contrary to expectations of a price increase in June, the Nigerian National Petroleum Corporation Limited (NNPCL) raised the official price of fuel on May 31, just two days after Tinubu’s announcement.
- The NNPCL revealed that the Federal Government has not made any subsidy payments since 2022, resulting in an outstanding debt of N2.3 trillion in fuel subsidies owed to the NNPCL as of March 2023.
- With the removal of fuel subsidies, the NNPCL clarified that while they are still selling old inventory, they must sell it at the new price to replenish their stock.
- The NNPCL will no longer be the sole importer of fuel in the country, and the market price for fuel will no longer be determined by the NNPCL. Instead, sellers will have the freedom to set their own prices based on market forces. However, government officials will be vigilant to prevent citizens from being exploited.
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