Presidency: Nigeria to gain $7.5bn annually from fuel subsidy removal

Sunday Dare, special adviser to the President on media and communications, has revealed that Nigeria stands to gain $7.5 billion annually from the removal of fuel subsidy.

 

In his “Tinubu Reforms Tracker” released on Tuesday, Dare said the tracker will regularly examine the impact of Tinubu’s reforms in 13 selected sectors and the progress made in terms of initial impact revealed.

 

“Each ongoing initiative will be examined by their potentials/ results in immediate, short term, midterm and their long term gains.”

 

The areas covered are: oil sector reforms, manufacturing sector reforms, the CNG initiatives, credit corp, education loans, youth sector reforms amongst others.

 

He noted that President Tinubu is committed to delivering on these reforms for the benefit of Nigerians, revealing that the reforms will unlock $2.5 billion in oil and gas investments.

 

He also noted the introduction of two pricing tiers for petroleum products, one by trucks and the other by sea.

 

Dare said, “Positive notes from President Bola Tinubu’s oil and gas sector reforms, as Nigeria is expected to $7.5 billion previously spent on oil subsidy.”

 

On Presidential Executive Orders signed by the President, Dare said the initiative will “immediately unlock $2.5 billion in new oil and gas investments.”

 

The President had, on his assumption of office on May 29, 2023, announced the removal of fuel subsidy.

The policy had been heavily criticised for the high rate of inflation in Nigeria.

Reports indicate that despite promising to bring down the price of petrol during his presidential election campaigns, the removal of fuel subsidy has led to repeated increases in petrol price by about 488 per cent – from N175 in May 2023 to N1,030 in October 2024.

 

The situation has caused more pains on the already impoverished Nigerians.

 

Nigeria’s inflation rose for the second straight month in October 2024, climbing to a four-month high of 33.9 percent from 32.7 percent in September.

 

As at May 2023, before the subsidy removal, the headline inflation rate was 22.41 percent as against April 2023 headline inflation rate which was 22.22%.

 

The current rise was driven primarily by escalating food prices, soaring energy costs and ongoing volatility in foreign exchange markets.

 

Food inflation, which makes up most of Nigeria’s inflation basket, quickened further to 39.2 percent in October, up from 37.8 percent in September amid reduced harvests caused by severe flooding and ongoing crisis in key agricultural regions.

 

Transportation inflation also picked up to 29.3 percent, driven by higher petrol and gas prices after subsidy removal, while housing and utilities inflation rose to 28.8 percent, up from 28.6 percent in September amid higher electricity tariffs.

 

The core inflation, which excludes the prices of volatile agricultural products and energy, quickened to an all-time high of 28.4 percent in October, up from 27.4 percent in the previous month. On a monthly basis, consumer prices climbed by 2.6 percent, after a 2.5 percent rise in the previous month.

 

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