Nigerian Government Confirms Fuel Subsidy-Cost N5.4 Trillion In 2024, Despite Previous-Denials (Details)

Nigerian Government Confirms Fuel Subsidy-Cost N5.4 Trillion In 2024, Despite Previous-Denials (Details)

In a significant turnaround, the Nigerian government has finally acknowledged that fuel subsidy expenditures are set to soar to N5.4 trillion by the end of 2024. This admission comes after previous assertions that the country had fully deregulated fuel prices.

Wale Edun, the Minister of Finance, revealed this development during a recent presentation of the Accelerated Stabilisation and Advancement Plan (ASAP) report. The ASAP report aims to tackle critical challenges hindering reform initiatives and drive development across various sectors of the economy.

According to Edun, the projected expenditure on fuel subsidy for 2024 contrasts starkly with previous years, standing at N3.6 trillion in 2023 and N2.0 trillion in 2022, at current rates.

However, conflicting statements have emerged from within the government. Minister of State for Petroleum Resources, Oil, Heineken Lokpobiri, asserted during a recent ministerial briefing commemorating President Bola Tinubu’s anniversary that fuel subsidy had been entirely eliminated.

Lokpobiri stated emphatically, “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.”

This declaration contrasts sharply with claims made by Festus Osifo, President of the Trade Union Congress, in April, who revealed that the government was presently employing a quasi-subsidy on fuel.

The genesis of this controversy can be traced back to Tinubu’s proclamation in June 2023, heralding the end of fuel subsidy, which precipitated a significant hike in fuel prices from N250 per litre to over N500.

Since then, fuel prices have continued to climb, with the average pump price reaching N702 per litre in April 2024.

The combined impact of fuel subsidy and the Naira’s floating policy implemented in June of the previous year has led to a surge in headline and food inflation, reaching 33.69 percent and 40.53 percent, respectively, by April 2024.