Data from the industry regulator has shown that Nigeria’s average daily consumption of petrol has decreased by 28%, since President Bola Tinubu ended a popular but expensive fuel subsidy at the end of May.
According to data provided by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the average daily consumption of petrol dropped to 48.43 million liters (13 million gallons) in June, down from the previous average of 66.9 million.
In Africa’s largest economy, a subsidy had kept prices low for decades, but it was becoming increasingly expensive for the country – the government spent $10 billion last year – leading to wider deficits and increasing government debt.
In January 2012, when Goodluck Jonathan, the president at the time, announced the removal of subsidies but however reversed the decision after nearly two weeks of “#OccupyNigeria” protests in response to the rise in fuel prices from 65 to 140 naira ($0.14 to $0.3) per litre.
Since the subsidy was eliminated, a black market that depended on petrol smuggled from Nigeria has collapsed in the neighbouring countries of Cameroon, Benin, and Togo.
Petrol prices have nearly tripled in Nigeria, angering unions and causing a spike in transport costs, a move that even Tinubu had predicted
Due to sporadic grid supply, it has also impacted millions of households that rely on petrol generators as well as, small businesses.
“I admit that the decision will impose [an] extra burden on the masses of our people. I feel your pain,” the president had said in a broadcast to mark Democracy Day – June 12.
The president said Nigerians should bear the decision to “save our country from going under”.
Nigeria could save up to $51 billion this year by eliminating the petrol subsidy and implementing foreign exchange (FX) reforms, according to a June 27 statement from the World Bank, despite having spent $2.41 billion on the subsidy in the first five months.
Source-Aljazeera
