Nigeria To Save N400bn Monthly As Tinubu Says ‘Fuel Subsidy Gone’

Newly sworn-in President, Bola Ahmed Tinubu has abolished fuel subsidy in Nigeria, saying it is no longer sustainable

He said this during his inaugural speech at the Eagles Square in Abuja

He said, “On fuel subsidy, the budget I met before I assumed office and what I heard is that there is no provision for subsidy. Fuel subsidy is gone.”

The Group Chief Executive Officer of the Nigerian National Petroleum Company Ltd, Mr Mele Kyari had stated that the lingering challenge of Petroleum Motor Spirit subsidies is becoming unbearable as the burden is clearly getting out of the capacity of the state to bear.

He gave the monthly fuel subsidy burden at about N400bn monthly adding that something needs to be done urgently to stop the spending.

According to the NNPC Boss, the differentials that domestic refining will provide is insignificant and cannot compensate for the subsidies on petroleum products.

Kyari said, “Nigeria and Africa as a whole produce a very small amount of carbon emissions, but we profoundly suffer the consequences of the gathering climate emergency: flooding and drought, sometimes simultaneously; tensions over land use… it is a long list.

“This is why the Dangote Refinery, with the New Deal we have been building, through the Petroleum Industry Act, are so transformative.

“It wont of course resolve the lingering challenge of Petroleum Motor Spirit subsidies as the burden is clearly getting out of the capacity of the state to bear and the differentials that domestic refining will provide is insignificant and cannot compensate for the subsidies.”

The Federal Government had in the last few months been taking steps to stop the payment of fuel subsidy by the end of June this year.

In the 2023 budget, the federal government had made provisions of N3.36trn for fuel subsidy payment to cover the first six months of this year.

This is in line with the 18-month extension announced in early 2022 by the government.

Already, a Subsidy Removal Committee had been set up which comprises the Ministry of Finance, Budget and National Planning, Ministry of Petroleum Resources, Nigerian National Petroleum Company (NNPC) Limited, the downstream and upstream regulators, Central Bank of Nigeria (CBN) and the Chief Economic Adviser to the President.

The 2023 Fiscal Framework and Appropriation Act as well as the Petroleum Industry Act (PIA) have made the provision that government should exit fuel subsidy by June 2023.