Fuel subsidy: President Tinubu claimed to abolish it, yet costs and black markets persist. Atiku demands transparency on fiscal impacts and ongoing subsidy expenditures, questioning government honesty.

Ever since President Bola Tinubu, at his inauguration on May 29, 2023, announced the end of the fuel subsidy, it has been a point of pride for his administration. But like any good mystery, the more we uncover, the more questions arise. Former Vice President Atiku Abubakar, recently took to social media, demanding transparency from the government. His post on X (formerly Twitter) stated:

“President Bola Tinubu, at his inauguration on May 29, 2023, announced the abolishment of the subsidy on PMS, popularly known as fuel. Ever since, it has been a bragging right of Tinubu and officials of his administration. I had in my statement reviewing the one year of the Bola Tinubu administration urged the government to come clean on the actual position of the subsidy policy.”

Abubakar’s words cut through the fog, raising a crucial point: if the subsidy has truly been abolished, why do fuel queues persist, and why has the ‘black market’ for fuel reemerged? He further questioned:

“…provide clarity on the fuel subsidy regime, including the fiscal commitments and benefits from the fuel subsidy reform and the impact of this on the Federation Accounts. It is curious that since April 2024, fuel queues have mounted at many filling stations across Nigeria, and the infamous ‘black market’ has sprouted in several states. How much PMS is being imported and distributed, and at what cost? What is the implicit subsidy?”

The real kicker came when it was revealed that government expenditure on fuel subsidies might reach N5.4 trillion in 2024, up from N3.6 trillion in 2023, the same year Tinubu claimed the subsidy had been scrapped. Abubakar didn’t mince words: 

“I wish to restate that Nigeria is not working, and what we have had in a little over a year is a cocktail of trial-and-error economic policies. Paying subsidies and lying about it is nothing to brag about. Nigerians deserve better than this deception.”

In the midst of this confusion, Tinubu defended his administration’s decision at the World Economic Forum in Riyadh, Saudi Arabia. He emphasized the necessity of removing the subsidy to avoid bankruptcy and reset the economy for growth. But if the subsidy is indeed gone, why are we hearing from the International Monetary Fund (IMF) that it could consume nearly half of Nigeria’s projected oil revenue? The IMF’s recommendation to phase out the subsidies to free up funds for government operations seems to contradict the official narrative.

Adding fuel to the fire, the reintroduction of subsidies has led to further economic challenges, including fuel scarcity and price hikes. Petrol prices have soared to over N700 per litre in some areas, exacerbating inflation and igniting protests.

A Historical Perspective

To understand the gravity of this situation, we must look back. The fuel subsidy, introduced in the 1970s, was a cornerstone of Nigeria’s energy policy, ensuring affordable fuel for decades. However, by 2022, the subsidy cost the government a staggering $10 billion annually. Attempts to remove it, like the 2012 Occupy Nigeria protests, were met with fierce resistance.

Fast forward to May 2023, when Tinubu, in a bold move, ended the subsidy during his inauguration speech. The decision marked a seismic shift in Nigeria’s fuel landscape, with 56 private firms receiving licenses to import petrol, a role previously monopolized by the Nigerian National Petroleum Corporation (NNPC).

The Questions that Remain

So, is the government paying subsidies or not? If the subsidy is gone, why is there talk of spending N5.4 trillion on it this year? Are we witnessing a case of “trial-and-error economic policies” as Abubakar suggests, or is there a more sinister game at play?

In a country where fuel is as vital as the air we breathe, transparency is not just a demand; it’s a necessity. As Nigerians, we deserve clear answers, not a smokescreen of half-truths and economic jargon.

Stay informed. Stay vigilant. The quest for truth and transparency continues.

Reference:

• Abubakar, Atiku. “Provide clarity on the fuel subsidy regime…” X
• International Monetary Fund (IMF) Reports
• World Economic Forum in Riyadh, Saudi Arabia.
• Subsidy Removal: Fueling Frustration – BlaccTheddi Post
• Nigerians In The Dark As IMF Adds To The Mix – BlaccTheddi Post