President Bola Ahmed Tinubu, GCFR during his Inauguration Speech on 29th May 2023, announced to Nigeria and the world that: “the Fuel Subsidy is gone!” signalling the end of the fuel subsidy on Premium Motor Spirit (‘PMS’).1 This was immediately followed by increases in PMS prices nationwide, with the Nigerian National Petroleum Company (‘NNPC’) Limited, on 31st May 2023, adjusted retail prices for PMS to prices ranging between NGN 488/litre in Lagos State to NGN 555/litre in Maiduguri, Borno State.2

The new price list revealed that the North Central has the highest increase in the average pump price of 181% from N190 to N534 per litre, North West had a 179% increase from N194 to N541 per litre, North East had an increase 178% from N199 to N552 per litre, South East had an increase of 174% from N189 to N518 per litre, South South had an increase of 169% from N191 to N512 per litre while South West had the lowest increase with 165% from N188 to N498 per litre. The new price also revealed Borno and Yobe states as having the highest new pump price of N577 per litre while Lagos state had the least pump price of N488.

Over the years, the subsidy policy has been a controversial issue in Nigeria – an oil producing country that paradoxically relies on imported PMS. Indeed, Nigeria has a long history of fuel subsidies dating back to the 1970s’ oil boom, when the Federal Government introduced subsidies on key commodities such as petrol, kerosene, and diesel to cushion the impact of price fluctuations on its citizens and residents. While many stakeholders in this debate argue that the PMS subsidies are the last hope for the common man to benefit from the “national cake,” the reality is that the subsidies have been a tremendous drain on the country’s resources and a source of corruption and government inefficiency. The stark truth is that the PMS fuel subsidies have really benefited neighbouring counties, rent-seekers and the rich, as opposed to the poor. Furthermore, if Nigerians – rich, middle-class, or poor alike – wish to see accelerated levels of socio-economic development, the expensive and unaffordable PMS subsidy must go. Already, within days of the subsidy removal announcement and the adjustment of PMS prices in Nigeria, data from Global Petrol Prices, which tracks the retail prices of refined petroleum products reveals sharp increases in the petrol prices of neighbouring countries.

The simple truth is Nigerians simply cannot have our cake and eat it! We can’t push for development while at the Source: World Bank Source: World Bank same time insisting on substantial expenditure on inefficient consumption such as subsidy that exceeds the combined expenditure on health, education, and infrastructure and that is largely not benefitting its intended beneficiaries and that we have to acquire debt, as is the case today to keep in place.

1 Premium Times Newspaper Article “Fuel Subsidy is gone — Tinubu declares” 29th May 2023, accessed from: https://www.premiumtimesng.com/news/top-news/601239-fuel-subsidy-is-gone- tinubu-declares.html.

2 Independent Newspaper Article NNPC Increases Fuel Price to N555 Per Litre, of 31st May 2023, accessed from https://independent.ng/just-in-nnpc-increases-fuel-price-to-n555-per-litre/ on 31st May 2023