Nigeria’s newly inaugurated President, Bola Tinubu, made a groundbreaking announcement during his inauguration on Monday, May 29. He declared the abolition of the long-standing fuel subsidy in Nigeria, a move that has already begun to send shockwaves through the country and its neighboring nation, Benin. Although the implementation of this measure is expected to take place by the end of June, according to Tinubu’s communication team, its effects are already being felt.

Previously, the official cost of petrol in Nigeria did not exceed N200 per litre. However, with the news of the subsidy’s removal, panic-stricken consumers flocked to service stations in an attempt to stock up on fuel before the measure came into effect. As a result, long queues formed at stations, leading to a significant surge in fuel prices. Some stations even witnessed prices soaring to as high as 537 or even 600 Naira per liter.

Impact on Smuggling and Neighboring Countries
One of the immediate repercussions of this fuel subsidy abolition can be seen in Benin, Nigeria’s neighboring country. In Cotonou and its surroundings, smuggled gasoline known as “Kpayo” is now being sold for 700 FCFA per liter, whereas it previously cost 450 FCFA. Benin heavily relies on Nigeria as a major producer of crude oil, and the stock that feeds the smuggling circuit is directly affected by Nigeria’s fuel subsidy policies.

Huge budget burden
The decision to abolish the fuel subsidy in Nigeria stems from the enormous costs it incurs for the government. Over the past 30 years, the subsidy has been consuming $13.5 billion annually, which accounts for a staggering 25% of the federal budget. Despite being a significant crude oil producer, Nigeria curiously imports the majority of its fuel. This paradox has led the new administration to recognize the counterproductivity of the subsidy and take steps to reverse this trend.

Expanding on the reasons behind the subsidy’s ineffectiveness, the Nigerian government has found that it leads to market distortions, encourages smuggling activities, and hampers the growth of domestic refining capabilities. By removing the subsidy, the government aims to create a more efficient and sustainable fuel market. However, this move has sparked concerns among citizens who fear the immediate impact of increased fuel prices on their daily lives.

Standing5:
We have heard. It is time for media Influencers under APC to jump on this and exergerate it to the heavens. It is just along the Nigerian borders and doesn't extent unto the whole of west Africa.

madridguy:
You are still in sifia pain over the election right? Its time for healing.
Nice one from the peoples choice, President Asiwaju Tinubu.

Standing5:
We have heard. It is time for media Influencers under APC to jump on this and exergerate it to the heavens. It is just along the Nigerian borders and doesn't extent unto the whole of west Africa.

MisterBanny:
Nigeria is the Giant of Africa, if Nigeria sneezes, other African countries will develop instant Cough.

GeneralPula:

It does and it’s not just West Africa, some other Africa countries too..

You can do the enquiry yourself..

Standing5:
...or you support it with a link.

GeneralPula:

I have no link..

Do your enquires..

Standing5:
my enquiries?

Xscape1993:
Okay. If this new move will benefit the poorest Nigerians, I will be the happiest person on earth. Nigerian politicians are unpredictable though....