Many Nigerians woke up on the morning of May 29th to received a shocker after Nigeria’s new president, Bola Ahmed Tinubu, during his inaugural speech, announced that the “fuel subsidy is gone”
Tinubu said: “We commend the decision of the outgoing administration in phasing out the petrol subsidy regime, which has increasingly favoured the rich more than the poor. Subsidy can no longer justify its ever-increasing costs in the wake of drying resources.
“We shall, instead, re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.”
While there was applause from the inaugural attendees, the announcement will bring a new unfolding set of realities upon Nigerians across the country.
Nationwide hike
Following the fuel subsidy removal, petroleum pump prices were adjusted across all cities in the country.
The petroleum marketers had shared documents containing figures that were described as the “Current NNPC Pump Price”, and “New Pump Price,” of petrol, showing the latest cost of PMS in various states and the Federal Capital Territory.
Figures in the document indicated that while the cost of petrol in Borno State was put at N557 per litre, the prices in Lagos, Abuja, Enugu and Ekiti were outlined as N488 per litre, N537 per litre, N520 per litre, and N500 per litre respectively.
NNPC Speaks
Confirming the adjustment in price on Wednesday, 31st May 2023, the NNPCL, in a statement by its Chief Corporate Communications Officer, Garba Deen Muhammad, said it had adjusted the pump prices of PMS across its retail outlets in line with current market realities.
“NNPC Limited wishes to inform our esteemed customers that we have adjusted our pump prices of PMS across our retail outlets in line with current market realities.
“As we strive to provide you with the quality service for which we are known, it is pertinent to note that prices will continue to fluctuate to reflect market dynamics,” he said.
Inflation Rises
Despite the recent increase in the Monetary Policy Rate (MPR) to 18.5 per cent by the Central Bank of Nigeria (CBN) to curtail the rise in inflation, the Consumer Price Index (CPI) which measures inflation rose to 25.41 per cent in May 2023, the CBN said inflation is a major challenge, adding that the drivers of inflation are outside its control including Premium Motor Spirit (PMS) supply.
Tough Times For Nigerians
With the new pump price across the country, millions of Nigerians were thrown into inexplicable hardship. The prices of foodstuffs and services are going out of the hands of the ordinary Nigerian trying to keep their heads over water.
People can no longer afford nutritious square meals. Food items that were staples before and some basic needs are now categorized as luxuries.
With the country recording its highest inflation rates, Nigerians will no doubt adapt, but consequentially let go of some lifestyles to be able to survive the current economic realities.
This is no exception to Lagos residents, who amongst others cut down the luxury movements from one point to the other.
People now trek long distances to cut down the expenses of commuting to and from work and from different destinations every day, some small businesses in other to keep their businesses open no longer run generators at night in places with erratic power supply.
Companies are resorting more to working from home, having realised that it is more productive to work from home.
The elasticity and resilience of the average Nigerian have further been stretched. These challenging times have pushed many to let go of the things they can not afford.
How Lagosians Are Coping Since Fuel Removal?
Lagos citizens expressed measures they adapted to cope with the hardship that came with the fuel subsidy.
A businessman, Friday Ede, who runs a barber salon spoke to our correspondent, saying that he resulted in using rechargeable clippers to cope.
According to Ede, if Nepa doesn’t bring the light, he waits until whenever the light is restored before he can work.
He said, “I have to buy two rechargeable clippers for my business since fuel is a no-go area now. If charged in full, one clipper conveniently can’t cut the hair of the least sixteen people before it runs down.
“Once the light comes, I charge them and then use them when the light is taken.”
Ogochukwu IIoka, a personal shopper, lamented the increased transportation fare, saying she does not know how she will cope with the current cost of transportation.
“I was on the road on the first-day subsidy was yanked. I use to enter the bus from my bus stop to Iyana Iba for a fare of N300 but I now pay N1000”, she told OsunDailyNG.
“I also face challenges delivering bill items, the price has gone up the roof, imagine buying an item and paying almost 25% of its price to ship it to its destination ( I ship nationwide) this has stalled and drawn business back so bad,” she lamented.
She continued saying that “Being on the road every day, due to the hike, I go home with almost nothing even with a lot of adjustments. I’m hoping it gets better to enable small businesses like mine to survive as we are already being pushed out of the market.”
A staff of Marketing Communications, Tumi said: “I stopped buying food online at work to save up extra cash, I just take food from home or go buy myself from somewhere close by.
“Although I live very close to my world and because of this my fair is not as expensive as others. Some of my colleagues live very far and have it bad, as they mostly carpool now.”
Isaac, A businessman, said: “I bought fuel yesterday at ₦488 at a Total filling station in Laspotech, Lagos to run my business. They were the only ones selling at that rate around here. The others sell over 500 naira and the quality is not the same.
“Most of the prices of goods in my shop have increased too, as everything in the market went up immediately after Tinubu removed the subsidy.
“Goods that were sold for let’s say, 300 Naira, now have an extra 50 naira or 100 naira added on it,” he added.
Few days ago, a video of a young Nigerian man who successfully converted a fuel-powered generator to use cooking gas emerged. The man (@kingsolya) revealed that a 2kg cylinder of gas would power the generator for 12 hours.
In the 2023 budget, the federal government had made provisions of N3.36trn for fuel subsidy payments to cover the first six months of this year.
This is in line with the 18-month extension announced in early 2022 by the government.
Already, a Subsidy Removal Committee had been set up which comprises the Ministry of Finance, Budget and National Planning, Ministry of Petroleum Resources, Nigerian National Petroleum Company (NNPC) Limited, the downstream and upstream regulators, Central Bank of Nigeria (CBN) and the Chief Economic Adviser to the President.
Although the Petroleum Industry Act (PIA) makes no provision for petrol subsidies, the 2023 Fiscal Framework and Appropriation Act made the provision that government should exit the petrol subsidy by June 2023.
