vSunday Dare, the Special Adviser to President Bola Tinubu on Media and Communications, has revealed that Nigeria stands to gain approximately $7.5 billion annually following the removal of the fuel subsidy. In his “Tinubu Reforms Tracker,” released on Tuesday, Dare highlighted the anticipated positive impacts of this policy, which aims to reshape Nigeria’s oil and gas sector.
Dare stated that the tracker will monitor the progress of ongoing reforms across 13 key sectors, including oil, manufacturing, and youth sector reforms. These reforms, he noted, are expected to unlock significant investments and economic gains for Nigeria, with the oil and gas sector alone expected to attract $2.5 billion in new investments.
“The removal of the fuel subsidy will free up $7.5 billion that was previously spent on subsidies, providing a substantial boost to the national economy,” Dare said. He also pointed to the introduction of two pricing tiers for petroleum products, one for truck transportation and the other for sea shipments, as part of the broader efforts to streamline the sector and improve efficiency.
Despite the initial promise during his campaign to reduce petrol prices, President Tinubu’s policy has resulted in significant increases in fuel costs. Petrol prices surged by approximately 488% from N175 per litre in May 2023 to N1,030 per litre by October 2024. This price spike has exacerbated inflationary pressures, leading to widespread criticism and economic hardship for many Nigerians.
Inflation in Nigeria has continued to rise, reaching a four-month high of 33.9% in October 2024, driven by soaring food prices, energy costs, and ongoing foreign exchange volatility. Food inflation, which constitutes the largest portion of Nigeria’s inflation basket, quickened to 39.2%, exacerbated by reduced harvests caused by severe flooding and instability in key agricultural areas.
Transportation inflation, influenced by higher petrol and gas prices, rose to 29.3%, while housing and utilities inflation also climbed to 28.8% due to increased electricity tariffs. Core inflation, which excludes volatile food and energy prices, hit an all-time high of 28.4%.
While the fuel subsidy removal has sparked considerable debate due to its short-term effects on prices, President Tinubu’s government remains committed to implementing these reforms, which are expected to yield long-term economic benefits, including the attraction of significant foreign investments and the eventual stabilization of the national economy.