The Nigerian government has admitted that the fuel subsidy will cost N5.4 trillion in 2024, after previously denying full deregulation of the product.
Minister of Finance Wale Edun disclosed this during a recent presentation of the Accelerated Stabilisation and Advancement Plan (ASAP) report. He explained that the ASAP report was designed to address key challenges affecting reform initiatives and stimulate development in various sectors of the economy.
“At current rates, expenditure on fuel subsidy is projected to reach N5.4 trillion by the end of 2024. This compares unfavourably with N3.6 trillion in 2023 and N2.0 trillion in 2022,” stated a draft copy of the ASAP presented by Edun.
Meanwhile, Heineken Lokpobiri, Minister of State for Petroleum Resources, Oil, insisted during a recent ministerial briefing marking President Bola Tinubu’s anniversary that the fuel subsidy has been completely removed. “I can confirm to you that subsidy is gone; officially, there is no subsidy; I want to make it clear that there is no subsidy in the country today,” he asserted.
In contrast, President of the Trade Union Congress Festus Osifo revealed in April that the Nigerian government was currently applying a quasi-subsidy on fuel.
Tinubu’s statement that “fuel subsidy is gone” in June 2023 served as a springboard for the policy’s implementation, causing the pump price of the product to increase from N250 per litre to over N500. Since then, the pump price of fuel has continued to surge, reaching an average of N702 per litre in April 2024.
The ripple effect of the fuel subsidy and the Naira floating policy in June last year saw Nigeria’s headline and food inflation skyrocket to 33.69 percent and 40.53 percent, respectively, in April 2024.
