Price of petrol to rise as Tinubu ends subsidy

President Bola Tinubu has announced the removal of petrol subsidy, setting the stage for increased petrol price in the country.

Mr Tinubu was inaugurated on Monday as Nigeria’s seventh democratically elected president, taking over from President Muhammadu Buhari whose eight-year administration left what many analysts consider to be a devastated economy, marked by high debt, inflation and unemployment.

Mr Buhari left without addressing the subsidy problem which costs the country trillions of naira annually. His government had pledged to fix the nation’s refineries to allow it remove fuel subsidy, but it faced a N3.3 trillion subsidy cost between January and June alone, a third of its total projected revenue for this year.

Mr Tinubu said he was aware the previous administration made no additional budget for fuel subsidy beyond the first part of the year.

“Fuel subsidy is gone,” President Tinubu said in his inaugural address at the Eagles Square on Monday, repeating previous government pledges that saved revenue will be channelled to development projects and to support the most vulnerable citizens.

– Impact on people

The removal of subsidy is bound to push the cost of petrol and transportation and living in general higher.

Fuel traders have warned that the price of petrol may rise to N750 a litre from the current official rate of less than N200, if subsidy is removed.

They said the price could be at N500 if he Central Bank of Nigeria provides foreign exchange for marketers at official rate.

Before leaving, the Buhari administration said it took $800 million from the World Bank to use as support for poor citizens impacted after the removal of subsidy of petrol.

– Other policies

Mr Tinubu said his government will aim at an annual economic growth of at least 6%.  He said the central bank must work towards unifying the exchange rate.