Nigeria, Africa’s largest oil producer, has witnessed a significant increase in petrol prices, reaching an all-time high of 617 naira ($0.78) per litre. This surge in prices comes nearly two months after President Bola Tinubu eliminated a longstanding but increasingly costly fuel subsidy. The new prices, an increase from the previous 557 naira ($0.70) per litre, were implemented across the country at fuel stations run by the state-owned Nigerian National Petroleum Co (NNPC), as indicated in a circular released by the Reuters news agency.
The NNPC has yet to comment on the price update. President Tinubu, who has initiated substantial reforms in Nigeria to address issues like the country’s high debt, announced the termination of the fuel subsidy during his inauguration on May 29. The subsidy, which dates back to the 1970s, had kept fuel prices low for many years. However, it proved to be a financial burden, costing the government $10 billion in the previous year.
The term “subsidy” became a focal point of national debate in 2012 when then-President Goodluck Jonathan attempted to remove it. This move led to a spike in fuel prices and triggered widespread protests, forcing Jonathan to backtrack on the decision.
With the subsidy now lifted, 56 private companies have been authorized to import petrol. Among these, ten are expected to commence deliveries in the third quarter of the year, breaking the NNPC’s monopoly as the sole petrol importer. Farouk Ahmed, the head of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), stated that three of these companies have already started importing fuel, with more expected to follow in the coming months.
Nigeria’s reliance on fuel imports stems from its inadequate refining capacity and the neglect of its existing refineries. In June, the country saw its average daily petrol consumption decrease to 48.43 million litres, a significant drop from the average of 66.9 million litres recorded from January through May before the subsidy removal, according to NMDPRA data.
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