CONTROVERSY MOUNTS AS FG INSISTS SUBSIDY IS GONE

In his inaugural speech in May 2023, President Tinubu announced the removal of the fuel subsidy, a decision that has since led to a sharp inflation increase of over 33%, with food inflation reaching 40%, pushing basic necessities out of reach for many Nigerians.

This policy change has been contentious, with ongoing debates and unclear communication from the presidency regarding the subsidy payments.

In February 2024, the International Monetary Fund (IMF) confirmed that Nigeria had covertly reinstated the subsidy, contrary to its directive to eliminate all subsidies to free up funds for government operations. This move has been criticized by prominent Nigerians and regional organizations as anti-people, urging the government to consider homegrown solutions to improve the economy and the lives of its citizens.

Following the subsidy removal in May 2023, fuel prices surged from N185 per litre to N400 per litre and eventually to N600 per litre at NNPC fueling stations, with other stations charging above N700 per litre. Although the government indicated that prices would fluctuate post-subsidy removal, fuel prices have consistently risen, even as global crude oil prices fluctuate.

A Signature TV investigation in September revealed that despite President Tinubu’s assurances that the subsidy was abolished, the federal government paid N169.4 billion as a subsidy in August to maintain the pump price at N620 per litre. Documents from the Federal Account Allocation Committee (FAAC) showed that in August 2023, Nigerian Liquefied Natural Gas (NLNG) paid $275 million as dividends to Nigeria via NNPC Limited. Out of this, NNPC used $220 million (N169.4 billion at N770/$) to cover the PMS subsidy and held back $55 million illegally.

Despite continuous denials from the federal government about reinstating the subsidy, Nigerian Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed in a report titled ‘Accelerated Stabilisation and Advancement Plan (ASAP)’ that the fuel subsidy is projected to hit N5.4 trillion this year. This disclosure, presented to President Bola Tinubu on June 4th, 2024, included an Executive Order to support the plan.

However, the Presidency has strongly refuted these claims. In a statement on Thursday, Bayo Onanuga, the Special Adviser on Information and Strategy to the President, dismissed the documents as “unofficial” and “policy proposals” still under review, urging the public and media to disregard them. This has fuelled further speculation about potential confusion within the presidency regarding the fuel subsidy issue.