The Nigerian government has admitted that fuel subsidy expenses will amount to N5.4 trillion in 2024, despite previous claims of complete deregulation of the product. This was disclosed by Minister of Finance, Wale Edun, in a recent presentation of the Accelerated Stabilisation and Advancement Plan (ASAP) report. The report aims to address key challenges affecting reform initiatives and stimulate development across various sectors.
According to a draft of the ASAP report, “At current rates, expenditure on fuel subsidy is projected to reach N5.4 trillion by the end of 2024. This compares unfavorably with N3.6 trillion in 2023 and N2.0 trillion in 2022.”
Meanwhile, Heineken Lokpobiri, Minister of State for Petroleum Resources, reiterated 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 claimed.
Contradicting this, Trade Union Congress President Festus Osifo revealed in April that the government was still applying a quasi-subsidy on fuel. Tinubu’s statement in June 2023 about the removal of fuel subsidy led to a significant increase in the pump price from N250 per litre to over N500. By April 2024, the price had surged to an average of N702 per litre.
The combined effects of the fuel subsidy and the Naira floating policy in June 2023 have resulted in skyrocketing inflation rates, with Nigeria’s headline inflation reaching 33.69 percent and food inflation hitting 40.53 percent by April 2024.