An off-the-cuff comment from Nigeria’s newly inaugurated president, Bola Tinubu, incited widespread chaos, as petrol stations across the nation witnessed snaking queues following his remark.
In his inaugural address on Monday, Tinubu casually stated, “The fuel subsidy is gone,” referencing a longstanding subsidy that has maintained low petroleum product prices for decades. The 71-year-old politician failed to elaborate on the significant policy change, causing immediate public unrest. The last attempt to eliminate the subsidy, made by a previous president over a decade ago, resulted in a wave of public protests.
Following Tinubu’s inaugural speech, hordes of people flooded the streets, seeking what they believed to be the final reserves of fuel at government-controlled prices. Unfortunately, many petrol stations ceased sales entirely, while others hiked their prices by over 200%, causing chaos and an artificial scarcity.
Despite the president’s team’s later clarification that the subsidy’s termination wouldn’t take effect until the end of June, the panic had already set in. By Wednesday, even the state-owned oil company announced its intention to raise petrol prices.
As a result of the sudden announcement, transport fares have skyrocketed, leaving commuters stranded at bus stops and prompting the influential labour union to prepare for a confrontation with the new government.
“President Tinubu brought tears and sorrow to millions of Nigerians on his inauguration day, replacing hope with an insensitive decision,” said Joe Ajaero, leader of the Nigeria Labour Congress (NLC).
Fuel subsidy in Nigeria
Despite its vast oil resources, Nigeria lacks the infrastructure to refine crude oil domestically, forcing the nation to import refined petroleum products which are then sold at government-fixed prices. This strategy, dating back to the 1970s, has kept petrol prices significantly lower in Nigeria than in countries such as the UK and Ghana.
However, Tinubu argues that Nigeria can no longer maintain this subsidy due to dwindling revenues. This year alone, the government had already earmarked $7bn to subsidise fuel for the first six months.
Ironically, President Tinubu led the opposition in 2012 when a government last attempted to remove the subsidy. At the time, he heavily criticised the move, resulting in a reversal of the policy.
Despite the current upheaval, there is now a growing consensus that the subsidy should be scrapped to free up funds for essential public services. However, this shift is likely to have broad repercussions in a country already struggling with a record unemployment rate of 33%, rampant inflation at 22%, and nearly half the population living below the poverty line.
Furthermore, Nigerians are already spending over 60% of their income on food and transport. With a stagnant minimum wage of $64 per month, the fear of increased impoverishment is palpable.
Tinubu’s sudden announcement came without the usual preliminary discussions with the unions, increasing public distrust. Many Nigerians now fear that they may already be the victims of an exploitative scheme. They question why petrol prices have already risen at both private and state-owned filling stations and what will become of the funds allocated for June’s fuel subsidy.
In a country where politicians are often perceived as mismanaging the nation’s oil wealth, the removal of the fuel subsidy without any substantial dialogue has sparked considerable public anxiety.
Image Credit: Erik Mclean on Unsplash
